SEBI Launches Pilot DLT Tokenisation Project; Corporate Bond Rollout Likely in 6–9 Months

India’s capital markets regulator, the Securities and Exchange Board of India (SEBI), has announced a pilot project to tokenise corporate bonds using Distributed Ledger Technology (DLT), marking a significant step towards digitising the country’s debt market infrastructure. The announcement was made by SEBI Chairman Tuhin Kanta Pandey on 26 May on the sidelines of the CareEdge Debt Market Summit in Mumbai.

According to Pandey, the pilot is currently in the evaluation phase and will likely take 6 to 9 months to move through various stages before broader implementation is considered. SEBI said the project will initially be launched on a limited scale, with a wider rollout depending on the outcome of the trial and risk assessment.

Focus On Improving Bond Market Efficiency

The regulator plans to test whether DLT-based tokenisation can improve the trading and settlement of corporate bonds. Tokenisation refers to converting ownership of a financial asset into digital tokens recorded on a blockchain or distributed ledger.

SEBI believes the move could materially improve the efficiency of India’s bond market. Pandey noted that tokenisation may create greater liquidity, enable instantaneous settlements, and allow automated transaction processing, reducing friction across the lifecycle of bond issuance and trading.

While DLT is already being used in some parts of India’s financial infrastructure, such as depositories and covenant monitoring, this is the first time SEBI has formally proposed a pilot for tokenised corporate bond market infrastructure at this scale.

Risk Assessment And Regulatory Coordination Underway

A key focus for the regulator remains risk management. Pandey said SEBI is evaluating the operational, legal and technological risks associated with the project before moving ahead. He specifically flagged future concerns around quantum-related risks, indicating the regulator wants to ensure that emerging technologies do not compromise security or market stability over time.

SEBI also plans to work with a broad group of stakeholders, including exchanges, depositories, market participants and technology providers, to build the framework for the pilot.

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Separately, the SEBI chief said discussions around corporate bond reforms are continuing with the Reserve Bank of India. He noted that the RBI has already issued draft guidelines linked to this area and is expected to release the final framework soon. According to Pandey, exchanges and SEBI are ready to proceed once the central bank gives the necessary regulatory clearance.

Sources:

India News

Reuters