India launches $620 billion corporate debt tokenization pilot, three companies have raised approximately $1.07 billion.

September 14: The Securities and Exchange Board of India (SEBI) and the Reserve Bank of India (RBI) recently launched the "Demat 2.0" pilot, introducing corporate bond issuance and settlement onto a permissioned distributed ledger, targeting a corporate bond market worth approximately $620 billion.

Currently, three companies—REC, Larsen & Toubro, and IIFL Finance—have raised a total of 102.5 billion rupees (approximately $1.07 billion) through this system. Among them, REC issued India's first tokenized corporate bond on September 7, raising 50 billion rupees.

The system connects tokenized bonds with the RBI's wholesale digital rupee, enabling simultaneous delivery of bonds and funds through a unified market interface, and uses smart contracts to automatically handle interest payments and principal redemption. SEBI stated that tokenization will not alter the original legal terms, credit ratings, and investor protection mechanisms of the bonds, and plans to open secondary trading and retail participation in the future.