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Sebi Launches Demat 2.0 Pilot for Tokenised Corporate Bonds
India has started testing a new way to create and trade corporate bonds.
The project is called Demat 2.0.
Instead of keeping bond records in separate systems, the bonds are represented as digital tokens on a shared electronic ledger.
The system is connected to the Reserve Bank of India’s digital currency for large financial institutions.
This could allow the bond and payment to move at the same time.
Computer instructions called smart contracts can automate payments and redemptions.
Sebi says this may make bond transactions faster and reduce mistakes.
Three companies have already issued tokenised bonds worth Rs 1,025 crore in total.
Officials also announced new UPI features called Tap & Pay and MyUPI.
Sebi launched Demat 2.0, a pilot for tokenising corporate bonds on distributed ledger technology.
The system connects with the Reserve Bank of India’s wholesale CBDC through the Unified Market Interface.
Demat 2.0 is designed to enable atomic settlement, moving bonds and money instantaneously.
Smart contracts could automate interest payments, redemptions and other corporate-bond servicing processes.
REC, L&T and IIFL have issued tokenised bonds worth a combined Rs 1,025 crore, while UPI also introduced Tap & Pay and MyUPI.
- Who
- The Securities and Exchange Board of India launched Demat 2.0, with the Reserve Bank of India; officials included RBI Governor Sanjay Malhotra and Sebi Chairman Tuhin Kanta Pandey.
- What
- A pilot project for tokenising corporate bonds and enabling instant atomic settlement was launched alongside new UPI features.
- Where
- The initiative is being developed within India’s regulated financial-market infrastructure and was announced at the Global Fintech Fest.
- When
- The announcement was made on Thursday at the Global Fintech Fest; the first-phase issuances are ongoing.
- Why
- The project is intended to make corporate-bond issuance, trading, settlement and servicing faster, more efficient and less error-prone.
Key facts
- Project
- Demat 2.0
- Technology
- Distributed Ledger Technology and smart contracts
- Settlement
- Atomic settlement, allowing the bond and money to move instantaneously
- Digital currency link
- Connected to the Reserve Bank of India’s wholesale CBDC through the Unified Market Interface
- Tokenised bond issuers
- REC, L&T and IIFL
- Issuance value
- Rs 1,025 crore combined
- Additional payment launches
- UPI Tap & Pay and AI-powered MyUPI
Quotes
Securities and Exchange Board of India (Sebi)
India's securities-market regulator
“Taken together, these features are expected to make the issue, settlement and servicing of corporate bonds faster, more efficient and less error-prone”
rediff.com
“This (Demat 2.0) enables atomic settlement, i.e., the bond and the money move instantaneously.”
rediff.com
Sources
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