India's SEBI Tokenizes $627 Billion Bond Market With Bitcoin (BTC) Kept Outside

SEBI's Demat 2.0 Pilot Goes Live

India has issued ₹1,025 crore (about $116 million) in tokenized corporate bonds, settling every transaction with the Reserve Bank of India's wholesale digital rupee. The Securities and Exchange Board of India confirmed on Sept. 10 that its Demat 2.0 pilot connects a distributed ledger maintained by the country's statutory depositories with the RBI's Unified Market Interface, moving the bond and its payment as a single atomic transaction. Three issuers have already used the system: state-owned power lender REC raised ₹500 crore from 18 investors on Sept. 7 in India's first native distributed-ledger corporate bond issuance, engineering group Larsen & Toubro raised an identical ₹500 crore from four investors on Sept. 9, and non-bank lender IIFL completed a ₹25 crore deal to a single investor the same day. SEBI and the RBI unveiled the pilot at the Global Fintech Fest in Mumbai, where SEBI Chairman Tuhin Kanta Pandey and RBI Governor Sanjay Malhotra presented the project jointly. The structural change sits on the settlement leg. Under the conventional process, issuers generally received funds two to three days after bidding; the pilot allows payment on the bidding day itself, and the regulator says atomic settlement removes the risk of one leg of a trade completing while the other fails. Ownership records sit on the depositories' ledger — permissioned infrastructure, unlike public proof-of-stake networks — so investors hold the tokens through existing demat accounts without opening a separate securities account or repeating identity checks. Participation does require activating Demat 2.0 with the relevant depository and holding a wholesale digital rupee wallet at a participating bank, since the cash leg settles in central bank money rather than privately issued tokens.

SEBI's Demat 2.0 tokenized bond launch announcement

Three Issuers, ₹1,025 Crore Raised

Transaction-level detail shows demand ran ahead of the headline figures. REC's opening deal offered ₹100 crore with a ₹400 crore greenshoe option and drew ₹796 crore in bids — more than half again the final amount issued — carrying a 7.30% coupon and a maturity of one year and nine months. The tokens themselves remain conventional securities: fixed interest rates, maturity dates and legal rights are unchanged, and existing requirements on credit ratings, debenture trustees, exchange listings and issuer disclosures continue to apply. Corporate actions are where the ledger earns its keep — interest payments and redemptions are programmed as smart contracts that deliver funds straight to investors' wholesale digital rupee wallets on their due dates, replacing the manual bondholder lists, calculations and bank-channel transfers that servicing requires today. SEBI has not released audited figures on cost savings or error rates from the first three deals. A later phase will connect the tokens to India's existing request-for-quote platforms, letting eligible investors buy and sell after issuance and restoring trading volume inside regulated venues, with sellers receiving digital-rupee funds immediately instead of waiting two to three days; retail access is planned after that, and no dates have been announced. The design also draws a deliberate line against public crypto rails: payment settles in central bank money, not stablecoins, and the bonds do not route through automated market maker pools or decentralized venues. Unlike wrapped Bitcoin, which mirrors a crypto asset on another chain, these tokens represent conventional securities. That posture is consistent with India's broader stance — regulators have kept private cryptocurrencies, including Bitcoin (BTC), at arm's length even as on-chain research firms consistently rank the population among the world's top adopters. Rather than pushing investors toward open blockchain markets, India is folding tokenization into a system it already controls, with banks, depositories and the central bank at the center. Readers tracking the market in real time can follow live spot and futures prices on Bitget.

Secondary Trading and Retail Access Next

For COINOTAG, the pilot is less a crypto story than a template story. SEBI's official press release states that Demat 2.0 remains a pilot without a committed full rollout, and the regulator has set no target for how much of India's corporate bond market — valued by the National Institute of Securities Markets at ₹53.64 lakh crore, roughly $627 billion, in September 2025 — will migrate onto the ledger. The closest comparison is with bank-led tokenization efforts such as those explored by JPMorgan Chase: India's version settles in central bank money, which strips out the issuer-credit question that hangs over private settlement tokens. The secondary-trading phase is where atomic settlement faces its real test.