The launch was announced jointly by RBI Governor Sanjay Malhotra and SEBI Chairman Tuhin Kanta Pandey at the Global Fintech Fest in Mumbai. SEBI had already signalled plans to pilot tokenised corporate bonds in India. Demat 2.0 shows that those plans have now moved into live issuance.

Three companies have already used the infrastructure to raise ₹1,025 crore. REC Limited and L&T raised ₹500 crore each, while IIFL Finance issued ₹25 crore worth of tokenised bonds.

Demat 2.0 Puts Bonds & Digital Rupees on the Same Rail

Under Demat 2.0, corporate bonds are issued as digital tokens on a private, permissioned distributed ledger operated by market infrastructure institutions.

The important part is that the bond does not become a different financial product just because it is tokenised. Depositories remain the statutory record keepers, while the token carries the same ISIN and the same economic and legal terms as the underlying corporate bond.

That means the coupon, maturity, covenants, rating, issuer obligations and investor rights remain unchanged.

India has been moving steadily toward this kind of regulated tokenisation. EtherWorld previously looked at the country's corporate bond tokenisation plans as well as the wider shift toward a tokenisation economy.

Demat 2.0 also connects the securities leg with the RBI's wholesale digital rupee. This allows the bond and payment to settle together rather than moving through separate processes.

The model is different from many public blockchain experiments. India's approach keeps the depositories, regulated trading infrastructure and central-bank money at the centre of the system.

That distinction is becoming important as institutions test different forms of blockchain-based settlement. EtherWorld has previously covered ZKsync's private blockchain settlement infrastructure for U.S. banks and the growing use of Ethereum in institutional and government adoption.

Three Issuers Have Already Raised ₹1,025 Crore

The pilot is already handling real issuance rather than simulated transactions.

1. REC Limited became the first issuer on September 7, 2026, raising ₹500 crore from 18 investors.
2. L&T followed on September 9, raising ₹500 crore from four investors.
3. IIFL Finance raised ₹25 crore from one investor on the same day.

Together, the three issuances brought the total value processed through Demat 2.0 to ₹1,025 crore.

SEBI says one immediate advantage is faster access to funds. Issuers can receive money on the same day as bidding instead of waiting two to three days in processes where settlement takes longer.

There is also less back-and-forth between intermediaries. A shared ledger can reduce repeated file transfers, reconciliations and validations because authorised participants are looking at the same record.

For investors, the experience is designed to remain familiar. Demat 2.0 works as an extension of the existing demat account rather than requiring investors to build their own blockchain setup.

This is a very different route from the public-chain RWA market, where financial products are increasingly being issued or represented directly on networks such as Ethereum. EtherWorld has covered Ondo bringing tokenised BlackRock ETF and Micron exposure onchain as well as BlackRock's push into tokenised Treasury products.

That broader market has grown quickly. EtherWorld reported that tokenised RWAs surpassed $30 billion in early 2026.

India's experiment is more controlled. The ledger is permissioned, depositories remain in charge of ownership records and settlement happens using central-bank digital currency rather than stablecoins.

Smart Contracts Could Automate Bond Servicing

Issuing the bond is only one part of the experiment. Corporate bonds also have to be serviced throughout their lifecycle. Interest has to be paid, ownership records have to be checked and redemption has to happen when the bond matures.

Demat 2.0 allows some of these processes to be handled through smart contracts. Details such as coupon rates, payment dates and redemption terms can be encoded into the system. When a payment becomes due, the ledger can use its ownership records to identify the bondholders and trigger payment to their CBDC wallets.

For issuers and intermediaries, the potential benefit is straightforward: fewer manual instructions and fewer reconciliation steps. That does not remove the existing regulatory structure around the bond.

Credit ratings, disclosures, debenture trustees, listing requirements, investment eligibility and investor-protection rules continue to apply.

This is also why the pilot matters beyond the technology itself. India is trying to introduce tokenisation without forcing regulated securities into a completely separate market.

That debate is already expanding. The proposed Asset Tokenisation Regulation Bill 2026 has added another layer to the discussion over how tokenised real-world assets should be recognised and governed in India.

Large financial institutions are asking similar questions globally. BlackRock CEO Larry Fink has repeatedly pushed the idea that tokenisation could reshape capital markets, while EtherWorld earlier examined his comments on India's potential role in tokenised finance.

Retail Trading & Secondary Markets Come Next

For now, Demat 2.0 is being rolled out in stages.

1. The first stage focuses on corporate bond issuance through India's existing Electronic Bidding Platform, with participation initially centred on institutional investors.
2. The next step is secondary trading. SEBI plans to connect existing Request for Quote and OTC trading platforms to the DLT infrastructure. The idea is not to build a new "blockchain exchange" for these bonds. Existing trading, price discovery and reporting systems will remain in place, while the settlement layer changes underneath them. Retail investors are also expected to enter during this phase. Until full secondary-market trading is available, the framework may allow peer-to-peer or demat-to-demat transfers so investors are not locked into their holdings.
3. A third stage could widen the network further by adding nodes operated by credit rating agencies, depository participants and other regulated entities.

The experience from these stages will determine whether the model can eventually support more instruments and more corporate actions.

That question is being tested far beyond India. Tokenised Treasuries, funds, stocks, commodities and private credit have all moved onchain in different forms. EtherWorld has previously looked at six RWA projects shaping the next phase of tokenisation and the wider convergence of institutions, regulation and tokenisation.

Instead of asking traditional finance to move onto an entirely new crypto market, SEBI and RBI are bringing parts of blockchain infrastructure into the financial system institutions already use. For now, it is still a pilot. But with ₹1,025 crore already issued, the experiment has moved beyond theory.

If secondary trading, retail access and automated servicing work as intended, corporate bonds could become the first serious test of how far India wants to take tokenised capital markets.

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Related Articles

• India’s SEBI Plans to Tokenise Corporate Bonds
• Are We Entering the Tokenisation Economy?
• India Spotlighted as BlackRock CEO Larry Fink Calls Tokenization Essential
• Indian MP Raghav Chadha Introduces Asset Tokenisation Bill 2026
• Where RWAs Go Next: 6 Projects to Watch

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