MSE Facilitates First Tokenised Corporate Bond

The Metropolitan Stock Exchange of India facilitated India’s first tokenised corporate bond issuance under the SEBI Demat 2.0 pilot on 11 September 2026. IIFL Finance was the issuer, and the pilot was launched at the Global Fintech Fest in Mumbai on 10 September 2026.

Demat 2.0 and tokenised securities

Demat 2.0 is a joint initiative of the Securities and Exchange Board of India and the Reserve Bank of India. The pilot uses blockchain-based processes, smart contracts, and the RBI’s wholesale Central Bank Digital Currency, known as e₹, for debt market settlement.

Under this system, corporate bonds are created as digital tokens on a distributed ledger. Ownership records continue to remain with India’s statutory depositories, which are the National Securities Depository Limited and the Central Depository Services Limited.

Settlement mechanism and market structure

The tokenised bonds are linked to the RBI’s wholesale CBDC through the Unified Market Interface. This arrangement enables atomic settlement, in which the bond and money move simultaneously.

Conventional bond settlement in India usually takes two to three days. The Demat 2.0 pilot is designed to enable same-day settlement for issuers and investors.

Issuers under the pilot

REC Limited was the first issuer under the pilot and raised ₹500 crore from 18 investors on 7 September 2026. L&T Limited raised ₹500 crore from four investors on 9 September 2026.

IIFL Finance became the third issuer and raised ₹25 crore from one investor on 9 September 2026. The total amount raised through the pilot reached ₹1,025 crore from three companies.

Important Facts for Exams

• Tokenised bonds are digital representations of debt instruments recorded on a distributed ledger.
• Atomic settlement means the transfer of securities and funds happens at the same time.
• Wholesale CBDC is intended for interbank and institutional transactions, not retail payments.
• SEBI regulates the securities market in India, while the RBI issues currency and manages monetary policy.

Regulatory features

Tokenised bonds retain the same legal status as conventional corporate bonds under Indian law. Investor safeguards, repayment obligations, and credit rating requirements remain applicable under existing regulations.

The pilot is being implemented in phases, with later stages planned for trading through existing RFQ platforms and possible access for retail investors.