June 01, 2026
By Shubhii Verma
SEBI Explores Blockchain-Based Corporate Bond Tokenisation
India’s market regulator, the Securities and Exchange Board of India (SEBI), is exploring the creation of a dedicated working group to study the use of blockchain technology for tokenising corporate bonds. The initiative could become one of the country’s most significant efforts to modernize debt markets and improve retail participation in fixed-income investments.
According to sources familiar with the discussions, the proposed working group may include technology specialists, debt market participants, regulatory bodies, and financial infrastructure institutions. Its primary objective would be to evaluate whether blockchain-based systems can make India’s corporate bond market more accessible, efficient, and liquid.
India’s bond market remains heavily dominated by institutional investors, while retail participation is estimated to be around just 1%, far below the penetration levels seen in the equity market. SEBI believes tokenisation could help bridge this gap by lowering investment barriers and expanding digital access to debt products across tier-2 and tier-3 cities.
Expanding Retail Access Through Fractional Bond Ownership
Under the framework being studied, corporate bonds could be divided into smaller digital units using blockchain or distributed ledger technology. Instead of purchasing an entire bond, investors would be able to buy fractional ownership through digital tokens representing beneficial ownership of the asset. The actual bond itself could continue to be held through a custodian or special purpose vehicle structure.
One of the key goals is to significantly reduce the minimum investment requirement for bonds. Currently, many debt instruments require investments ranging from ₹1,000 to ₹10,000 or more, limiting participation from smaller retail investors. Tokenisation could potentially reduce entry levels to as low as ₹100 or even ₹1 in certain structures, making bond investments more accessible to the broader population.
SEBI is also studying whether blockchain infrastructure could improve secondary market liquidity and price discovery, which have long been considered major weaknesses in India’s debt markets. Discussions reportedly include features such as blockchain-enabled settlements, smart contract-based automated coupon payments, near real-time transaction processing, and integration with online investment platforms.
SEBI Chairman recently confirmed that the regulator is already conducting a pilot project focused on tokenisation of corporate bonds. However, he also emphasized the importance of addressing regulatory oversight, cybersecurity protections, and investor safety before any broader rollout takes place.
Strengthening India’s Digital Debt Market Ecosystem
Market experts say the move aligns with SEBI’s larger strategy of creating a stronger digital ecosystem for debt market distribution beyond traditional brokerage systems. At the same time, regulators remain cautious about potential risks, particularly around cyber resilience, technology readiness, and maintaining adequate safeguards as participation expands.
