What is India’s tokenised corporate bond pilot?

Securities and Exchange Board of India launched a pilot programme testing blockchain-based settlements for corporate bonds using distributed ledger technology. The project aims to improve liquidity, settlement speed and trading efficiency in India’s debt markets.

Why is SEBI using blockchain for bond settlements?

SEBI believes tokenisation and distributed ledger technology could reduce settlement delays and improve market participation. Regulators also want to test whether blockchain systems can support faster and more automated trading infrastructure for institutional finance.

What are tokenised corporate bonds?

Tokenised bonds are traditional debt securities converted into blockchain-based digital tokens. These tokens can potentially support near-instant settlement, fractional ownership and more efficient secondary market trading.

How large is India’s corporate bond market?

Industry estimates cited in the report place India’s corporate bond market at around ₹59 lakh crore. Despite its size, trading activity remains relatively limited compared with larger and more liquid global bond markets.

How could tokenisation help smaller investors?

Regulators are reportedly evaluating whether fractional ownership structures could lower entry barriers for retail participants. Fractional tokenisation may allow investors to buy smaller portions of high-value bond products.

Is India becoming more supportive of blockchain technology?

Yes, India is increasingly supporting regulated blockchain infrastructure for institutional finance and settlement systems. However, the country still maintains strict rules and taxation policies for retail cryptocurrency trading.

How does India currently regulate cryptocurrencies?

India imposes a 30% tax on crypto profits and applies a 1% tax deducted at source on transactions. Crypto exchanges must also comply with strict anti-money laundering, KYC and transaction reporting requirements.

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India SEBI tests tokenised bond settlements

Q: Why does India’s corporate bond market need reform?

India’s corporate bond market reportedly suffers from low liquidity because many institutional investors hold bonds until maturity rather than actively trading them. Limited retail participation has also reduced price discovery and secondary market activity.

Written by Isaac FrancisPublished May. 28 2026Last Updated May. 28 2026

Securities and Exchange Board of India approved a pilot programme to test tokenised corporate bond settlements using distributed ledger technology in India’s debt markets.

SEBI chairman Tuhin Kanta Pandey said the pilot will initially operate on a limited scale while regulators evaluate whether blockchain-based infrastructure can improve liquidity and settlement efficiency in the corporate bond market.

Pandey said tokenisation could support “instantaneous autonomous settlements” while helping address long-standing inefficiencies tied to low secondary market participation and limited retail investor activity.

The project will reportedly take between six and nine months to implement as SEBI, stock exchanges and market participants coordinate with the Reserve Bank of India on operational and regulatory requirements.

Under the proposed framework, traditional corporate bonds would be converted into blockchain-based digital tokens capable of near-instant settlement and potentially fractional ownership for smaller investors.

India’s corporate bond market is estimated at roughly ₹59 lakh crore but continues to face low trading activity because many institutional investors hold bonds until maturity rather than actively trading them in secondary markets.

The initiative highlights India’s growing interest in regulated blockchain infrastructure even as the country maintains strict oversight of cryptocurrencies through high taxation, mandatory compliance reporting and anti-money laundering requirements for digital asset platforms.