India’s Market Regulator Proposes Blockchain Tokenisation for Corporate Bonds

The Securities and Exchange Board of India is moving to modernize the country's debt market through the use of new technology. Chairman Tuhin Kanta Pandey announced that the regulator is exploring a pilot project to use blockchain for the tokenisation of corporate bonds. This initiative is designed to improve settlement efficiency, transparency, and overall accessibility for investors. The proposal marks a significant step in the ongoing effort to deepen India's financial infrastructure. Speaking at the CareEdge Debt Market Summit in Mumbai, Pandey emphasized that while the market has grown, corporate bonds still carry inherent risks that require careful oversight. The regulator intends to use digital tokens to streamline how these assets are traded and recorded. By leveraging blockchain, the board hopes to reduce the time and complexity currently involved in bond settlements. This shift could make it easier for a wider range of participants to enter the debt market. India has seen substantial growth in its corporate bond sector over the last decade. Outstanding corporate bonds have risen from over 17 lakh crore rupees in the 2015 fiscal year to more than 59 lakh crore rupees by 2026. Debt issuances in the current fiscal year have mobilized over 9 lakh crore rupees, which is nearly double the amount raised through equity markets. This rapid expansion highlights the increasing importance of debt as a primary funding source for Indian businesses. The move toward tokenisation is part of a broader strategy to ensure the market remains robust and reliable. Regulators are looking for ways to maintain this momentum while protecting the interests of individual and institutional investors. Further details on the pilot project are expected as the board continues its consultations with industry stakeholders. The adoption of blockchain technology in finance is becoming a global trend as markets seek faster and more secure ways to handle transactions. If successful, the project could serve as a model for other emerging economies looking to digitize their capital markets. The focus remains on creating a transparent environment that encourages long-term investment.