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India’s securities regulator has reaffirmed plans to test tokenized corporate bonds on distributed ledger technology and settle them through the Reserve Bank of India’s wholesale CBDC. SEBI’s annual report places the pilot inside its forward regulatory roadmap and expands the project beyond tokenized issuance. The test will also examine faster settlement, automated servicing, smart-contract functions and direct links with RBI settlement infrastructure.
SEBI Chairman Tuhin Kanta Pandey first outlined the pilot at the CareEdge Debt Market Summit in Mumbai in May. He described it as an efficiency test that would build on existing market infrastructure rather than replace it.
India already has a blockchain base for parts of the bond market. NSDL and CDSL have used blockchain systems since a 2021 SEBI circular to monitor security creation and bond-covenant compliance.
The annual report now gives the pilot a broader role. SEBI plans to test tokenized issuance and automated debt servicing while connecting settlement to the RBI’s wholesale CBDC rails. Those rails already support government securities settlement, interbank call-money lending, and tokenized certificate-of-deposit issuance.
The project targets a corporate bond market with about Rs. 59 lakh crore outstanding. Yet secondary trading remains limited because institutions often hold bonds to maturity, while retail participation stays low.
Can tokenized settlement improve activity in a market where investors largely hold bonds to maturity? SEBI is testing whether faster, cheaper, and more transparent settlement can change how market participants use corporate debt. The market has already grown sharply. Settled corporate bond trading value rose 27.9% in fiscal 2025-26 to Rs. 21.2 lakh crore, according to SEBI’s annual report.
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Off-market settlements through depositories climbed 65.5% to Rs. 89,293 crore. Meanwhile, electronic Request for Quote trades increased 5.9 times and lifted average monthly turnover to Rs. 60,985 crore.
RBI testing also gives the pilot a possible settlement foundation. The central bank has tested tokenized certificates of deposit through its wholesale CBDC infrastructure and is examining commercial paper tokenization. SEBI has not named participating issuers, exchanges, depositories or financial institutions. It has also not confirmed a launch date for the corporate bond pilot.
Pandey previously outlined a limited six-to-nine-month test period. If that timetable remains unchanged, the next major milestone could arrive between late 2026 and early 2027. The initiative remains separate from India’s unresolved cryptocurrency policy debate. SEBI can advance the bond pilot within securities regulation, while broader crypto rules remain outside this specific experiment.
