India central bank, markets regulator launch tokenization pilot for corporate bonds and digital settlement

The Reserve Bank of India (RBI) and the Securities and Exchange Board of India (SEBI) have launched “Demat 2.0,” a pilot designed to test tokenised corporate bonds and faster settlement using blockchain technology and the central bank digital currency, according to The Indian Express. The pilot, unveiled on Sept. 10 at the Global Fintech Fest in Mumbai, began with three issuances, including a Rs 500 crore Larsen & Toubro issue backed by investors such as SBI, Axis Bank, SBI Mutual Fund and NSDL. The project will examine whether distributed ledger technology can integrate the security and settlement sides of transactions more closely, while speeding up settlement and automating parts of asset servicing, SEBI Chairman Tuhin Kanta Pandey said. CDSL, NSDL, BSE, NSE, HDFC Bank, ICICI Bank and NPCI are among the institutions involved. “Demat 2.0” follows the original Demat initiative launched in 1996, which replaced paper-based shareholding with digital records. The new system brings tokenised securities together with digital settlement assets and smart contracts, using CBDC for settlement. Pandey said that the framework would maintain legal certainty over ownership while introducing...