India Launches $620 Billion Corporate Bond Tokenization Pilot Using Digital Rupee

The Securities and Exchange Board of India (SEBI) has launched the Demat 2 pilot program, enabling the issuance of corporate bonds as digital tokens on distributed ledgers. Settlement is conducted via the Reserve Bank of India's wholesale digital rupee. The pilot involves major entities including REC, Larsen & Toubro, and IIFL Finance, which have collectively raised approximately 102.5 billion rupees. The initiative aims to reduce transaction risks by enabling synchronous settlement of tokenized bonds and digital currency. Future phases will incorporate smart contracts for interest payments and redemptions, with plans to expand into secondary market trading and retail investor access.