India has launched a pilot for tokenized corporate bonds as the Reserve Bank of India and the Securities and Exchange Board of India move toward a new digital framework for issuing, holding and settling financial assets.
RBI Governor Sanjay Malhotra and SEBI Chairman Tuhin Kanta Pandey unveiled the initiative at the Global Fintech Fest 2026. The project is expected to combine blockchain or distributed ledger technology with the RBI’s central bank digital currency to support the settlement of tokenized securities and assets.
The initiative marks a significant step toward bringing corporate bonds onto blockchain-based infrastructure, with the technology potentially enabling faster settlement, greater transparency and wider access to investment products.
Pandey said the regulators were working toward Demat 2.0, a next-generation securities infrastructure designed to support tokenized assets and digital settlement. He also said regulators were moving toward predictive market supervision as part of efforts to modernize India’s securities ecosystem.
The tokenization framework could initially focus on bonds before expanding to other financial instruments, including equities, mutual fund units and electronic gold receipts.
Tokenization could broaden investor access
Real-world asset tokenization involves representing ownership or economic rights linked to financial or physical assets through blockchain-based digital tokens. In the case of corporate bonds, tokens can represent ownership or claims associated with the underlying debt instrument, while blockchain infrastructure maintains records of ownership and transfers.
The technology could potentially reduce manual processes involved in issuance, settlement, coupon payments, redemptions and other corporate actions. Smart contracts could automate certain functions, allowing transactions and payments to be processed with less intervention from intermediaries.
Tokenization could also enable fractional ownership, allowing investors to gain exposure to portions of larger bond issues rather than purchasing entire instruments. That could make certain fixed-income products more accessible to smaller investors and potentially improve diversification.
A permissioned blockchain could provide regulators, issuers and investors with a time-stamped and verifiable record of transactions, provided the system operates within applicable know-your-customer, custody and regulatory requirements.
Wider real-world asset market in focus
The potential applications extend beyond corporate bonds. Experts at an industry discussion in Mumbai said tokenization could eventually cover private credit, trade receivables, treasury-related cash flows and other income-generating assets.
Ramana Kumar A, president of the ADI Foundation of Abu Dhabi, said the opportunity should be viewed more broadly than bond tokenization alone. He argued that assets capable of generating predictable cash flows could also be brought onto tokenized financial infrastructure.
Such applications could create additional investment and liquidity channels for investors who currently have a narrower choice of products between bank deposits, savings instruments and more sophisticated wealth-management offerings.
However, market participants have also highlighted the need for clear legal and regulatory definitions. Authorities would need to establish precisely what a token represents, how ownership rights are enforced and how custody, settlement and investor protection requirements apply before tokenized markets can expand significantly.
Fintech growth accompanied by trust concerns
Malhotra said India’s digital financial transformation had expanded substantially through cooperation between the public and private sectors. He cited the growth of bank accounts, insurance coverage, pension participation and UPI transactions as evidence that digital finance had become embedded in everyday economic activity.
He said fintech firms could help extend financial services to groups that traditional lenders have struggled to serve, including women, farmers and small businesses.
At the same time, Malhotra warned that rapid technological development would have limited value without public trust. He urged fintech companies to address risks involving opacity, exclusion and cybersecurity and said financial and personal data should be handled as a fiduciary responsibility rather than simply treated as a commercial asset.
Malhotra also called for stronger operational resilience, business continuity and cybersecurity, arguing that these should be treated as core responsibilities rather than expenses to be minimized.
He cautioned companies against building business models around gaps between regulatory categories and expanding rapidly before seeking regulatory clarity.
India’s fintech ecosystem ranks third globally and attracted $2.4 billion in funding last year, while the country has 30 domestic unicorns, according to Malhotra.
The RBI governor said India’s experience with financial inclusion and interoperable digital infrastructure could have applications in other markets. He added that the central bank viewed fintech companies as strategic partners in adopting emerging technologies while maintaining financial stability and public trust.
