NSDL and CDSL launch Demat 2.0 for tokenised securities and CBDC settlement

New business data points to the fact that India’s depositories have rolled out Demat 2.0, a next-generation platform that supports tokenised securities and enables near-instant settlement through the Reserve Bank of India’s wholesale Central Bank Digital Currency.

The initiative forms part of a joint SEBI-RBI pilot for tokenised corporate bonds. It was unveiled at the Global Fintech Fest 2026 by RBI Governor Sanjay Malhotra and SEBI Chairman Tuhin Kanta Pandey. Both National Securities Depository Limited (NSDL) and Central Depository Services (India) Limited (CDSL) are involved in operating the distributed ledger.

Demat 2.0 Is the next step after the original dematerialisation system introduced around 30 years ago. Demat 1.0 replaced physical share certificates with electronic records. This improved settlement speed, reduced disputes and built greater trust in the market. Settlement cycles gradually shortened from several days or weeks to the current T+1 cycle, with optional T+0 available in some segments.

Demat 2.0 extends that framework. It operates on a blockchain platform and uses two linked wallets: a securities wallet that holds the tokens and a currency wallet that holds the wholesale CBDC (digital indian rupee).

Under the process, an issuer creates bond tokens. Market participants subscribe and successful bidders receive allocation. The tokens are credited to the investor’s Demat 2.0 account. Simultaneously, the corresponding CBDC amount is transferred in an atomic delivery-versus-payment mechanism. The investor parts with money and receives the securities at the same moment. There is no time lag between the two legs of the transaction.

This instantaneous settlement reduces settlement risk compared with the existing system, where a gap stays between payment and delivery.

The platform is at present in pilot mode and limited to bond tokens. Later stages are anticipated to add trading capabilities and expand to other instruments, subject to regulatory approvals and market maturity. Market participants keep use their existing demat accounts and KYC. No separate account is required.

Corporate actions such as interest payments and redemptions can be automated through smart contracts under applicable rules.

Tokenised bond issuances by REC Limited, Larsen & Toubro Limited and IIFL have already boosted a combined Rs 1,025 crore on the distributed ledger platform operated by the depositories.

Several Western markets still operate on T+2 settlement for conventional securities, with Europe preparing to move to T+1. India, he stated, has consistently led in introducing market infrastructure innovations in a regulated manner and stays in a leading position with this development.

Demat 2.0 retains the legal structure, investor rights and regulatory safeguards of the existing demat system while adding atomic settlement and tokenisation capabilities.

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