On September 7, REC issued a ₹500 crore corporate bond on NSE’s electronic bidding platform, with a coupon rate of 7.30% and a tenor of one year and nine months, achieving a bookbuilding amount of ₹796 crore. The bonds were recorded as native tokens on a permissioned ledger owned by the depository, with fund settlement executed using the RBI’s wholesale digital rupee, e₹-W. REC announced that subscription, allotment, and listing were completed on the same day. In its September 10 announcement, SEBI listed this issue alongside two others by L&T and IIFL as the inaugural issuances under the Demat 2.0 pilot, totaling ₹1,025 crore.
Tokenized issuance settled with central bank money is not new in India. The RBI’s wholesale digital rupee pilot began in November 2022, and according to the RBI’s Q&A updated through February of this year, 16 institutions—including banks and non-banks—are participating. Current use cases include settlement of secondary market government securities, interbank lending settlement, and tokenized issuance and settlement of certificates of deposit. Demat 2.0 applies this approach for the first time to corporate bonds under SEBI’s jurisdiction, integrating with existing infrastructure for depositories, EBP, and exchanges. Under Demat 2.0, investors and issuers of corporate bonds must use e₹-W wallets to complete the payment leg.
Demat 2.0 did not rebuild a corporate bond market. Bond issuance still proceeds through the original exchanges and EBP, and bond terms, ratings, investor rights, and the legal status of custody remain unchanged. The primary changes occur at the level of recordkeeping and settlement: bonds are recorded on DLT, funds are settled via e₹-W, and securities and funds are delivered versus payment. However, this does not mean that intermediate clearing institutions have been eliminated, as the complete fund pathway for Stage I has not yet been disclosed.
The most specific benefit listed by SEBI is the timing: under traditional methods, issuers typically receive funds 2–3 days after bidding, whereas under Demat 2.0, funds are credited on the same day. To convert this into a financial consideration, one must also know from which date interest begins to accrue. If the interest commencement date precedes the fund settlement date, the issuer is effectively paying interest on funds that have not yet been received—this period is eliminated with same-day settlement. If the interest commencement date already aligns with fund settlement, this period does not exist.
However, public materials do not simultaneously provide the actual coupon accrual start date for the REC debt and the issuer’s actual receipt date. Although the allocation date is stated in the offering documents, the coupon accrual start date must still be determined based on the specific issuance terms and cannot be directly replaced by the allocation date. SEBI’s reference to “funds arriving 2–3 days after bidding” reflects an industry practice describing the time interval from bidding to receipt, not the gap between the coupon accrual start date and the receipt date; therefore, it cannot be directly used to calculate carry.
Currently, we can calculate the per-unit amount. Based on a principal of ₹500 crore and a coupon rate of 7.30%, each day difference corresponds to approximately ₹10 lakh, equivalent to a one-time amount of about 2 basis points of the principal. The actual savings will be determined only after both dates above are confirmed.
The currently verifiable additional burdens primarily stem from access requirements. Participating institutions must open a Demat 2.0 account and connect their e₹-W wallet through their bank; issuers also require a wallet to receive funds. However, existing public documents from the RBI do not clarify whether such wholesale wallets earn interest, what minimum balance must be maintained, or how funds can be exchanged with bank accounts. Although the retail digital rupee explicitly does not earn interest, this rule cannot be directly applied to e₹-W. Therefore, at this stage, we can only confirm that participants face an additional layer of access and operational requirements, but cannot yet quantify the associated financial costs.
The scope of Stage I is still limited, and full secondary trading has not yet been opened. If holders wish to transfer their assets, they must first complete peer-to-peer transfers through custody, and settlement of such transfers may be conducted via CBDC or banking channels rather than atomic settlement.
SEBI describes one of the benefits of atomic settlement as reducing settlement risk, but it is important to distinguish between two issues: whether the securities leg and the cash leg can be completed simultaneously, and whether, if one party fails to perform, someone else steps in to fulfill the delivery. Atomic settlement addresses the former but does not automatically provide the latter. As a conceptual reference, in secondary settlement of corporate bonds, NSE Clearing uses a gross settlement-by-gross settlement approach; if one party fails to deliver timely and in full, the transaction is canceled, and the securities and funds received are returned. This example from secondary settlement rules is cited solely to illustrate that "simultaneous delivery" and "performance guarantee" are distinct concepts, and does not imply that primary issuance under Demat 2.0 followed the same path.
It has been confirmed that the issuer's settlement time has been advanced for Demat 2.0; whether this translates into actual coupon savings will depend on confirmation of the coupon accrual date and the actual settlement date.
Source
Direct source
SEBI — Successful Launch of the “Demat 2.0” Pilot Project for Tokenized Corporate Bonds
REC Limited — Announcement regarding the pilot issuance of this ₹500 crore tokenized corporate bond
RBI — Digital Rupee (e₹) – FAQs
Baseline / Mechanism Source
NSE Clearing — Corporate Bond | Clearing and Settlement
SEBI — Electronic Bidding Platform (EBP) Framework
Calculation instructions
The figures of ₹10 lakh/day and approximately 2 bps/day are calculated by CoinFound based on the issuance parameters of this REC offering: ₹500 crore × 7.30% ÷ 365 ≈ ₹10 lakh/day. This number represents only the magnitude of the daily difference between the interest accrual date and the issuer’s receipt date; it does not reflect actual realized savings, as the actual interval cannot be confirmed from publicly available information.
Source Gap
The actual start date for coupon accrual and the date the issuer received funds have not been disclosed, which is critical to determining whether the carry mentioned in the text exists; the interest accrual terms, balance requirements and redemption mechanisms, and liquidity arrangements for e₹-W are not detailed in any of RBI’s current public materials; the specific role of the clearing house in the funding pathway of Demat 2.0 Stage I is not mentioned in any published announcements or Q&As; the specific launch schedule for Stage II has not yet been announced.