Now Reading: SEBI and RBI pilot tokenisation of corporate bonds for faster settlement
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SEBI and RBI pilot tokenisation of corporate bonds for faster settlement
SEBI and RBI pilot tokenisation of corporate bonds for faster settlement
The Securities and Exchange Board of India (SEBI) is launching a pilot project on tokenisation of corporate bonds in coordination with the Reserve Bank of India. SEBI Whole-Time Member Amarjeet Singh said…
The Securities and Exchange Board of India (SEBI) is launching a pilot project on tokenisation of corporate bonds in coordination with the Reserve Bank of India. SEBI Whole-Time Member Amarjeet Singh said on Thursday that the pilot will test whether shared data can enable simultaneous transfer of securities, making settlement more efficient and cutting reconciliation costs. It will also examine automated coupon payments via smart contracts.
The pilot is not intended to create a separate trading market, but to make the existing bond market simpler and faster. Separately, SEBI is working on deepening the corporate bond repo market, which sees daily volumes of around Rs 6,000 crore but accounts for less than 1 per cent of overall repo volumes. A formal market-making framework, proposed in the Union Budget 2026-27, is also being designed to improve secondary market liquidity.
To broaden access, SEBI is developing a distribution framework allowing online bond platform providers to appoint certified channel partners, with mutual fund distributors also eligible. A consultation paper is expected soon. The regulator is also working on a graded risk-o-meter for bonds. Singh noted the market has nearly 33,000 outstanding instruments across 7,200 issuers, creating fragmentation that SEBI aims to address by concentrating issuers in fewer benchmark issues.
Indian Opinion Analysis
Tokenisation of corporate bonds would bring the settlement cycle closer to real time, cutting the current T+1 lag and reducing counterparty risk. The bond market's fragmentation, with 33,000 instruments across 7,200 issuers, makes liquidity pooling difficult. The pilot's success could push the RBI to extend the model to government securities, which form the bulk of the Rs 200-lakh-crore debt market. The real constraint is legal: the Indian Trusts Act and depository regulations need amendments to recognise tokenised assets. Watch for the consultation paper on distribution, expected in weeks, which will reveal how SEBI plans to certify channel partners and what disclosure norms the risk-o-meter will enforce.
Source: thehindubusinessline.com
This story was synthesised by AI from the source linked above.
