India starts tokenizing $620 billion corporate bond market with digital rupee settlement – Cryptonews.net

India has initiated tokenization of corporate bonds through blockchain technology paired with central‑bank digital currency, deepening its integration into established financial systems.

The Securities and Exchange Board of India (SEBI) launched Demonet 2.0 this week—a pilot operating on top of electronic investment accounts that investors currently use for equities and debt instruments. Under the scheme, corporate bonds may be issued as digital tokens recorded on a regulated, permissioned distributed ledger.

Early adopters demonstrate strong momentum. State‑owned power‑sector lender REC raised ₹500 crore (approximately US$56 million) through the platform last month; engineering‑and‑construction giant Larsen & Toubro follow with another ₹500 crore; non‑bank lender IIFL Finance contributes ₹25 crore (about US$2.8 million).

While the underlying securities retain conventional characteristics—fixed coupons, set maturities, and standard investor safeguards—the settlement mechanisms have been streamlined. Instead of routing the tokenized bond and the digital rupees used for purchase through separate clearing pathways, the two assets move as an indivisible pair.

DEMAT 2.0 creates a direct linkage between the tokenized‑bond ledger and the Reserve Bank of India’s wholesale digital rupee via the Unified Market Interface. This coupling eliminates the risk associated with splitting payment across multiple channels, delivering a more efficient trade execution process.

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