India’s tokenized corporate bonds run on a distributed ledger, and investors never touch a key. The depositories hold them.
SEBI’s frequently asked questions, issued alongside Wednesday’s announcement, set out a design in which the technology changes and almost nothing else does. The depository remains the authoritative record of beneficial ownership under the Depositories Act, 1996, and the ledger is described as the form that record takes rather than a replacement for it.
The 24-question document accompanies press release 56/2026 on the Demat 2.0 pilot, under which three issuers have raised ₹1,025 crore since September 7.
Who Holds the Keys
The answer to question seven is unambiguous. Depositories hold and manage the private keys on behalf of investors, so investors need not manage cryptographic keys independently or acquire specialized infrastructure.
That is the design decision the rest of the structure rests on. The network is private and permissioned, with nodes operated initially by the depositories and stock exchanges, and technology and implementation support supplied by NPCI. Controlled access may extend to other regulated entities as the pilot progresses.
Existing legal controls carry across intact. A freeze, attachment, or direction applying to a demat account or ISIN applies equally to the linked tokenized holding.
No New Account, No Fresh KYC
A Demat 2.0 account is an extension of the investor’s existing demat account rather than a separate one. Registration happens through the existing depository interface by linking an eligible demat account to a CBDC wallet and providing consent, using existing KYC.
Two arrangements are needed: the Demat 2.0 account through the depository and a wholesale e₹ wallet opened with the investor’s own bank under the RBI’s pilot. Issuers do not need a Demat 2.0 account at all, only a CBDC wallet linked to a designated bank account to receive proceeds and make payments.
SEBI states no investment in specialized technology, hardware, connectivity, or blockchain infrastructure is required by either issuers or investors.
An Exit Before the Secondary Market
The document addresses what happens to an investor wanting to sell before secondary trading is enabled. A peer-to-peer, demat-to-demat transfer may be enabled on request through the depositories, with the payment leg completed outside the atomic settlement architecture through CBDC or banking channels.
SEBI states the intention is that investors are not locked in during the interim period.
When secondary trading does arrive, it will not run on a new venue. Existing RFQ and OTC reporting platforms of the stock exchanges will be linked to the ledger, with price discovery, order handling, and reporting continuing through current channels.
Three Stages
Stage one covers issuance through Electronic Bidding Platform integration with asset servicing on the ledger, and participation is expected to be institutional. Stage two enables secondary trading and extends access to retail participants. Stage three would extend nodes to credit rating agencies, depository participants, and other regulated entities, alongside other instruments and a wider range of corporate actions.
The pilot runs under SEBI’s Regulatory Sandbox, with any relaxations provided within that framework for a defined scope and period.
What Does Not Change
A tokenized bond remains a security under the Securities Contracts (Regulation) Act, 1956, retaining the same ISIN, issuer obligations, coupon, maturity, covenants, rating, security, and investor rights. Requirements on credit rating, debenture trustees, listing, and disclosure continue to apply.
No separate credit rating is needed, since tokenization does not alter the issuer’s obligations or the bond’s cash flows. Investment eligibility is unchanged, determined by the characteristics of the security rather than the database technology behind it.
The India-First Claim
SEBI draws an explicit comparison with tokenization elsewhere. It names Project Helvetia III in Switzerland, Project Evergreen in Hong Kong, US treasury bonds, and issues from BlackRock, JP Morgan, and AIIB, arguing that in those cases tokenization was undertaken by individual issuers on separate platforms.
India, the regulator says, is the first country in which corporate bonds have been issued natively on a distributed ledger with ownership recorded by statutory depositories and the funds leg settled in central bank digital currency, inside existing regulated market infrastructure. That claim is SEBI’s own.
Its stated benefits include issuers receiving funds on the day of bidding rather than two to three days later, the same improvement for investors in the secondary market, and coupons and redemption credited automatically to bondholders’ e₹ wallets by smart contract.
Also Read: India’s First Tokenized Corporate Bonds Go Live; Secondary Market Yet to Open
![trade[XYZ] Launches Event Contracts on Hyperliquid Using HIP-4](https://www.cryptotimes.io/wp-content/uploads/2026/09/TradeXYZ-Launches-Events-on-Hyperliquid-for-Prediction-Markets--420x280.jpg)
