India's Demat 2.0 Pilot Settles $107 Million of Tokenized Bonds

Three Indian companies have sold corporate bonds that were never converted from paper into electronic form, because they were created as ledger tokens to begin with. The Securities and Exchange Board of India and the Reserve Bank of India announced the pilot, which they call Demat 2.0, on 11 September. The three issuances came to $107 million, a dollar figure every account reviewed here carries identically. Cash settles in the central bank's wholesale digital rupee, and the security and the money change hands in one step. REC, Larsen and Toubro and IIFL were the issuers.

Three issuers, one week

REC, a public-sector lender, raised 500 crore rupees from 18 investors on 7 September, by The Block's tally. Cointelegraph dates that sale to a Monday, and 7 September was a Monday, so the two agree. Larsen and Toubro raised the same amount from four investors two days later, and IIFL, a non-bank lender, raised 25 crore rupees from a single investor the same day. The rupee totals do not agree across accounts. Three outlets put the combined figure at 10.25 billion rupees. PANews renders the same three sales as 50 billion, 50 billion and 2.5 billion rupees, ten times larger, while giving the dollar equivalent as the same $107 million. Its own two numbers do not reconcile, and this article uses the dollar figure the whole set shares.

Where the settlement lag goes

The bonds sit on distributed ledgers operated by India's statutory depositories, and the payment side reaches them through the Unified Market Interface, the rail connecting those ledgers to the RBI's wholesale central bank digital currency. What that buys is atomic settlement, meaning the bond leg and the cash leg complete together or not at all, instead of clearing on separate timetables. SEBI's claim for it is narrow. Issuers get their money the same day bidding closes, against the two to three days the existing process takes. Smart contracts pay the coupons and handle redemption. The legal terms are untouched, with the same ISIN, the same repayment obligation and the same investor rights a dematerialised bond carries.

SEBI said the pilot makes India "the first country to combine bonds issued natively on a distributed ledger, ownership records maintained by statutory depositories and settlement in CBDCs."

That sentence appears in one account only, Cointelegraph's, and the claim inside it is the regulator's own characterisation. No other outlet reviewed here quotes it, and it stands on that single rendering.

Who can use it, and when

This phase is institutional and primary only. Investors bid through the demat accounts they already hold, with no new securities account and no repeat identity check, though TheCryptoBasic reports they must first activate Demat 2.0 with a depository and hold a wholesale CBDC wallet through a participating bank. Secondary trading comes next, on request-for-quote venues, and retail participation after that. Neither has a date. Three accounts describe the same sequence and not one of them attaches a timetable to it.

The parts nobody has published

Which depository ran which issuance is in none of the accounts reviewed. Neither are the coupons, the maturities or the names of the investors, and no participating bank has been identified. PANews puts India's corporate bond market at about $620 billion, a figure no second outlet here repeats, so how much of that market this pilot represents is not something the published record settles. Other regulators in Asia have taken slower routes to the same place. South Korea's staged plan opens in February 2027, and Japan is still studying ledger settlement for the early 2030s. India has issued the bonds first and left the harder half, a market where they can be traded, to a phase with no date on it.