What is Demat 2.0 launched by RBI Governor and SEBI Chairman at GFF 2026?

Demat 2.0 is a new market infrastructure developed by market infrastructure institutions to test the tokenisation of corporate bonds using Distributed Ledger Technology (DLT).

Under Demat 2.0, a corporate bond is created as a digital token on a shared electronic ledger maintained by market infrastructure institutions. The ledger is owned by the depositories, while the bond remains the same legal instrument with the same investor protections.

The pilot was jointly announced by RBI Governor Sanjay Malhotra and SEBI Chairman Tuhin Kanta Pandey at the Global Fintech Fest 2026 in Mumbai. The initiative marks India’s move towards using tokenisation and DLT within the existing regulated securities market infrastructure.

How does Demat 2.0 work?

Demat 2.0 is connected to RBI’s wholesale CBDC, or e₹, through the Unified Market Interface (UMI).

This enables atomic settlement, meaning the bond and the money move simultaneously rather than being settled separately. In practice, this can cut down the settlement time and reduce the risk involved in waiting for one side of the transaction to complete.

The system can also automate interest payments and redemption through smart contracts, instructions embedded in the ledger that execute automatically when conditions are met.

What changes with Demat 2.0?

For issuers, one of the biggest changes is speed. Funds can reach the issuer on the same day as bidding, compared with the two to three days that the process generally takes today.

For investors selling bonds in the secondary market, funds can also be received immediately rather than after the usual two to three-day wait.

Demat 2.0 is also expected to reduce manual file-sharing, reconciliation and validation work for intermediaries, while lowering issuance and servicing costs for issuers.

What happens to interest and redemption payments?

Demat 2.0 aims to automate the servicing of bonds.

Today, issuers or registrars typically obtain the list of bondholders from depositories, calculate the amount payable to each investor and route the payments through the banking system.

Under the new system, authorised institutions can access the bondholder information on the shared ledger, while interest and redemption payments can be triggered automatically through smart contracts.

The money would be credited in e₹ to the bondholder’s CBDC wallet on the due date.

Who has issued tokenised bonds so far?

The Demat 2.0 pilot has already moved into actual issuances, with three companies raising a combined ₹1,025 crore through tokenised bonds.

REC was the first issuer, raising ₹500 crore from 18 investors on September 7. L&T followed with a ₹500 crore issue from four investors on September 9, while IIFL raised ₹25 crore from one investor from a single investor on the same day.

REC’s issue was India’s first pilot issuance of a tokenised corporate bond under SEBI’s regulatory sandbox framework.

Is Demat 2.0 the same as cryptocurrency?

No. Demat 2.0 is not creating a new cryptocurrency or an unregulated market for bonds. The technology used to record ownership and service the bond is changing, but the underlying security remains the same. The issuer’s obligation to repay investors does not change, nor do investor rights.

Credit-rating requirements, debenture trustees, listing requirements and disclosure norms continue to apply.

The tokenised bonds are also intended to trade within the existing regulated market infrastructure rather than creating a completely separate bond market.

What are the benefits of tokenised bonds?

The key benefits expected from Demat 2.0 include:

Faster settlement: Bond and money can move simultaneously through atomic settlement.
Lower costs: Automation could reduce issuance and servicing costs.
Less reconciliation: Market intermediaries may need to handle fewer files and manual validations.
Lower settlement risk: Atomic settlement removes the risk of one side of a transaction moving before the other.
Faster access to funds: Investors can receive secondary-market sale proceeds immediately.
Automated servicing: Interest and redemption payments can be triggered through smart contracts.

How is India’s Demat 2.0 different?

Tokenisation pilots and digital bond issuances have already taken place in markets including Switzerland and Hong Kong, as well as through global financial institutions.

India’s proposed model is distinctive because corporate bonds are being issued natively on a distributed ledger, with ownership records held by statutory depositories and the funds leg settled using central bank digital currency within the existing regulated market infrastructure.

Can retail investors buy Demat 2.0 bonds?

Not yet.

The pilot is being rolled out in phases. The initial issuances are aimed at testing the infrastructure, while later phases are expected to extend tokenised bond trading to existing request-for-quote (RFQ) platforms and eventually provide access to retail investors.

For investors participating in the current pilot, no separate securities account is required. Tokenised bonds are held through the investor’s existing demat account, although the investor needs to enable Demat 2.0 with the depository and maintain a wholesale CBDC (e₹) wallet with a participating bank for the funds leg.

What happens next for Demat 2.0?

The experience from the pilot will determine how the infrastructure develops and whether it can eventually be rolled out more widely.

The broader aim is to make corporate bond issuance, settlement and servicing faster and more efficient without changing the underlying regulatory protections for investors.

In that sense, Demat 2.0 is less about replacing the existing bond market and more about rewiring how the market operates behind the scenes.