India’s Demat 2.0 Could Change Bond Tokenization: Here’s How It Works

The country has taken a major step toward bringing tokenized real-world assets (RWAs) into its mainstream financial system. The Securities and Exchange Board of India (SEBI) and the Reserve Bank of India (RBI) have launched a pilot infrastructure for issuing, holding, trading, and settling corporate bonds as digital tokens. Called Demat 2.0, the model is being integrated directly into the nation’s existing regulated securities market, unlike many tokenization experiments built on standalone blockchain platforms. $116M Tokenized and Counting India’s approach allows corporate bonds to be created natively on a distributed ledger maintained by market infrastructure institutions, with ownership records held by the country’s statutory depositories. As written on Demat 2.0’s explanatory page, the system is connected to the RBI’s wholesale digital rupee through its Unified Market Interface. This allows the securities and cash legs of a transaction to settle at the same time. This so-called atomic delivery-versus-payment model eliminates the period previously needed when one party has transferred an asset while still waiting for the other side to complete the payment. The statement also not...