Stories
Tokenisation in India: Unpacking Securities, Regulation, and Investor Impact
- •Tokenisation represents ownership or economic rights in an asset as a digital token on a distributed ledger, intriguing global securities regulators.
- •India is exploring tokenisation through IFSCA's pilot at GIFT City and SEBI's Demat 2.0 pilot for tokenised corporate bonds, launched September 10, 2026.
- •SEBI's pilot treats tokenisation as an evolution of existing dematerialised infrastructure, with the depository remaining the authoritative record of beneficial ownership.
- •Key recurring issues include title and custody, AML/KYC for cross-border flows, smart contract programmability, and interoperability/cybersecurity.
- •India's approach is regulator-led, sandbox-first, and incremental, with current initiatives serving as tests of architecture rather than settled rulebooks.
Key Questions Answered
Announced jointly by the RBI and SEBI on September 10, 2026, Demat 2.0 is an onshore pilot treating tokenisation as an evolution of existing dematerialised infrastructure. REC Limited issued the first tokenised bonds on September 7, raising ₹5,000 million, followed by L&T and IIFL.
SEBI keeps the depository as the authoritative record of beneficial ownership, ensuring the ledger does not displace its statutory role under the Depositories Act, 1996. Depositories hold and manage private keys for investors so holdings sit inside existing demat accounts under standard KYC rules.
The funds leg connects to the RBI's wholesale CBDC through the Unified Market Interface, allowing the securities and cash legs to settle atomically. This eliminates counterparty exposure, settlement intervals, and traditional intermediaries.
