SEBI's tokenised bond pilot 'Demat 2.0' adds MSE, sees first corporate bond issue

A major step has been taken toward promoting digital technology in India's debt market. The Metropolitan Stock Exchange of India (MSE) has joined SEBI's "Demat 2.0" pilot project, launched under the regulator's regulatory lab framework. The pilot's aim is to tokenise corporate bonds.

The pilot uses new technology to raise corporate bonds, making transactions faster, more transparent and more effective, while giving more investors access to the market. This is why the initiative is being seen as significant.

Under the project, corporate bonds are being raised directly on Distributed Ledger Technology (DLT). However, the official record of ownership will continue to rest with statutory depository institutions. Notably, final settlement of transactions is being carried out through Central Bank Digital Currency (CBDC), within the existing regulated market infrastructure. The project thus brings together the old market system and new digital technology.

Under the pilot, MSE's Electronic Bond Platform (MSE EBP) facilitated the process for IIFL Finance Limited's first tokenised corporate bond issue. Trust Investment Advisors Private Limited acted as arranger and advisor for the bond issue. This process of issuing corporate bonds through tokenisation is being seen as significant for the development of India's debt market infrastructure.

The main aim of the initiative is to make capital-raising more effective through technology. Faster settlement of transactions, greater transparency in the process and wider access are among the benefits tokenisation could bring. Since the new technology is being tested within the existing structure of the regulated market, the use of such digital tools in India's debt market is expected to grow going forward.

The pilot project for tokenised corporate bonds was launched at the Global Fintech Fest 2026. SEBI chairman Tuhin Kanta Pandey and Reserve Bank of India governor Sanjeev Malhotra were present at the event, along with several stakeholders from market infrastructure, financial markets, fintech and technology sectors.

MSE managing director and CEO Latika S. Kundu, explaining the significance of the initiative, said that through "Demat 2.0", SEBI's push for innovation would play an important role in shaping the future of India's debt market. She also said tokenisation would bring together technology and reliable market infrastructure, making capital-raising more effective, transparent and secure than before.