1 hr ago
Sebi’s Demat 2.0 Pilot Tests Tokenised Corporate Bond Settlement
Demat 2.0 is a trial for putting corporate bonds onto a secure digital ledger.
The bonds remain legally the same as ordinary bonds.
Their important details, such as maturity, rating and investor rights, do not change.
Investors can use their existing demat accounts rather than opening a new one.
The bonds can be exchanged using the wholesale digital rupee.
This means the bond and the payment can move at the same time.
Smart contracts may also automate coupon payments and redemptions.
The trial is still mainly for institutions and does not yet prove that a large trading market will develop.
Future success will depend on more trading, more investors and wider participation.
The pilot issues corporate bonds as native digital tokens on a private, permissioned DLT network operated by depositories.
Tokenised bonds retain their ISIN, coupon, maturity, rating, covenants and investor rights.
Existing demat accounts can be linked to a CBDC wallet, while depositories manage private cryptographic keys.
The wholesale digital rupee enables simultaneous securities-and-cash settlement through atomic Delivery-versus-Payment.
The ₹1,025 crore pilot is initially focused on issuance, with secondary trading and wider retail participation planned for later phases.
- Who
- The Securities and Exchange Board of India, depositories, institutional investors and participants including BondScanner, Mudrex and CoinSwitch are involved or commenting on the pilot.
- What
- Demat 2.0 is a phased pilot to issue corporate bonds as digital tokens and settle them against the wholesale digital rupee.
- Where
- India’s regulated financial-market infrastructure, using networks operated by depositories.
- When
- The article describes an ongoing phased pilot; it does not provide a specific launch date.
- Why
- The pilot aims to reduce settlement and counterparty risk, automate bond servicing and test a framework for tokenising regulated financial assets.
Potential Market Transformation
Cautious Pilot Assessment
Settlement and risk
Potential Market Transformation
Supporters say linking tokenised securities with the wholesale digital rupee can enable simultaneous settlement, reduce settlement risk and make transactions more programmable.
Cautious Pilot Assessment
The article does not report a completed market-wide transformation; the system remains a phased pilot whose broader effects are still untested.
Tokenisation’s wider significance
Potential Market Transformation
Supporters describe Demat 2.0 as a possible blueprint for tokenising other regulated financial assets and applying India’s digital infrastructure to additional asset classes.
Cautious Pilot Assessment
Critics and cautious observers note that the ₹1,025 crore pilot is small relative to the $620 billion corporate bond market, so its long-term significance cannot yet be established.
Access and liquidity
Potential Market Transformation
Later expansion could bring secondary-market trading, retail participation and automated corporate actions, potentially broadening the system’s usefulness.
Cautious Pilot Assessment
The pilot is currently issuance-led and institutional, and its success will depend on secondary-market depth, broader participation and a carefully sequenced retail rollout.
Key facts
- Pilot value
- ₹1,025 crore
- Market comparison
- India’s corporate bond market is described as worth $620 billion
- Technology
- Private, permissioned distributed-ledger network operated by depositories
- Settlement method
- Atomic Delivery-versus-Payment using the wholesale digital rupee
- Investor access
- Existing demat accounts can be linked to a CBDC wallet
- Potential automation
- Smart contracts could trigger coupon payments, redemptions and other corporate actions
- Next phases
- Secondary-market trading and wider retail participation are planned for later stages
Quotes
Ashish Singhal
Co-founder of CoinSwitch
“SEBI’s Demat 2.0 pilot represents a significant evolution in the architecture of India’s capital markets. Its importance lies not merely in tokenising corporate bonds, but in creating a programmable and interoperable framework for issuance, ownership, settlement and asset servicing.”
businesstoday.in
“The launch of Demat 2.0 is a significant development for the financial markets because the country is applying its Digital Public Infrastructure playbook, on which banks, exchanges and depositories operate, to other asset classes.”
businesstoday.in
Sources
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