India’s National Securities Depository Limited (NSDL) has launched Demat 2.0, a blockchain-based platform designed to support tokenized securities and enable near-instant settlement using the Reserve Bank of India’s wholesale central bank digital currency (CBDC).
The platform was unveiled at the Global Fintech Fest 2026 by RBI Governor Sanjay Malhotra and Securities and Exchange Board of India (SEBI) Chairman Tuhin Kanta Pandey, marking another step in India’s efforts to apply blockchain technology to financial market infrastructure.
Demat 2.0 pilot raises ₹1,025 crore
Demat 2.0 uses two interconnected digital wallets, with one dedicated to security tokens and the other to CBDC-based payments. The architecture is designed to allow securities and funds to move simultaneously through atomic settlement.
Under this structure, the transfer of a tokenized bond and the corresponding payment occur at the same time, reducing the settlement risk that can arise when the delivery of an asset and the associated payment take place separately.
The platform’s primary objective is to combine tokenized securities with wholesale CBDC settlement, creating a faster and more synchronized mechanism for transactions in the securities market.
The pilot phase has already involved companies including REC Limited, Larsen & Toubro and IIFL. Collectively, the participating issuers raised about ₹1,025 crore through tokenized bonds, demonstrating an early use case for blockchain-based debt issuance in India.
The initiative also seeks to reduce friction for participants by using existing customer verification processes. Investors do not need to establish separate accounts specifically for the pilot, as the system can rely on existing know-your-customer (KYC) credentials.
The initial implementation is focused on bonds, but the scope could expand to additional types of securities as regulatory frameworks develop and the market gains greater experience with tokenized financial assets.
Smart contracts could automate bond servicing
Another potential feature of Demat 2.0 is the use of smart contracts to automate certain post-issuance activities. Subject to applicable regulations and the rules governing individual securities, programmable contracts could be used for functions such as interest payments and bond redemptions.
Such automation could reduce the need for manual processing while improving the consistency and timing of recurring financial transactions. For issuers, this could streamline administrative work, while investors could benefit from more automated servicing of tokenized assets.
Smart-contract functionality could eventually allow routine bond payments and redemptions to be executed automatically, potentially reducing operational costs and improving efficiency for issuers, investors, and market intermediaries.
The use of wholesale CBDC as the settlement asset also gives the platform a direct connection to central bank-issued digital money rather than relying solely on conventional payment rails. This could help create a more integrated environment in which ownership records, securities transfers and settlement funds are processed through connected digital infrastructure.
The launch comes as financial institutions globally explore tokenization as a way to modernize securities issuance, settlement and asset servicing. India’s approach combines distributed-ledger technology with established regulatory and market infrastructure, potentially allowing tokenized assets to develop without requiring participants to abandon existing compliance systems.
The Demat 2.0 pilot indicates how blockchain and central bank digital currency can be combined within regulated financial infrastructure, with the potential to shorten settlement cycles and reduce transaction-related risks.
Further expansion will depend on regulatory approvals, market adoption, and the ability of the platform to demonstrate reliable performance at greater scale. For now, its focus remains on tokenized bonds, providing a controlled environment for testing how blockchain-based securities can operate alongside India’s existing financial market framework.
