India Launches Demat 2.0 Pilot for Tokenized Corporate Bonds

India's Securities and Exchange Board and the Reserve Bank of India have launched a Demat 2.0 pilot to issue and settle corporate bond tokens on permissioned ledgers operated by NSDL and CDSL. According to Odaily, the pilot covers India's roughly $620 billion corporate bond market. State-owned lender REC, Larsen & Toubro, and non-bank lender IIFL Finance have raised a combined $107 million through the framework. The system connects to the RBI's wholesale digital rupee for simultaneous settlement of bonds and funds, and smart contracts are used to automate interest payments and redemptions. SEBI said the legal terms, credit ratings, trustee arrangements, listing rules, and investor protections for tokenized bonds remain unchanged. Investors can hold the tokens in existing Demat accounts, and secondary trading and retail participation will be introduced in later phases.