India Launches Tokenization of $620B Corporate Bond Market
India Begins Tokenizing Its $620 Billion Corporate Bond Market
India has started testing blockchain-based issuance and settlement for corporate bonds, marking an early move to bring distributed-ledger technology into a corporate debt market valued at about $620 billion.
The pilot, launched by the Securities and Exchange Board of India (SEBI), is branded “Demat 2.0” and is designed around the dematerialized (“demat”) accounts investors already use to hold securities such as stocks and bonds.
Under the framework, corporate bonds are issued as native digital tokens on a private, permissioned distributed ledger operated by India’s statutory depositories, NSDL and CDSL. Settlement is carried out using the Reserve Bank of India’s wholesale digital rupee, pairing tokenized securities with central-bank digital money.
Three issuers have already used the system, raising a combined 1,025 crore rupees (about $107 million) in a single week. State-owned lender REC went first on Sept. 7, raising 500 crore rupees from 18 investors in what it described as India’s first tokenized corporate bond. It was followed by Larsen & Toubro with another 500 crore rupees and non-bank lender IIFL Finance with 25 crore rupees.
SEBI’s design keeps the bonds themselves conventional—fixed interest rates, maturity dates, and standard investor rights—while changing how they are issued and settled. Corporate actions such as interest payments and redemptions can also be handled through smart contracts, according to the pilot’s structure.
For now, the program remains limited. Retail investors do not yet have access, and a functioning secondary market for trading tokenized bonds has not opened. Later phases are expected to introduce secondary trading and, eventually, broaden access.
The initiative stands out in a country that has been cautious toward private cryptocurrencies, even as India frequently ranks among the top countries for crypto adoption in on-chain research. In this case, the focus is on regulated market infrastructure: moving a traditional asset class onto token rails and using central-bank digital money for settlement, rather than introducing new crypto assets.
