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SEBI Pilot: Corporate Bonds Go Digital with Demat 2.0
10 Sep
Summary
- SEBI's Demat 2.0 pilot for corporate bonds is progressing successfully.
- New framework enables simultaneous settlement of securities and payments.
- SEBI is also preparing markets for potential quantum computing threats.
The Securities and Exchange Board of India (SEBI) has successfully concluded the first phase of its Demat 2.0 pilot program for corporate bonds. This initiative aims to integrate secondary market trading into a new technology framework, enhancing efficiency and security.
The Demat 2.0 framework employs distributed ledger technology (DLT) to manage corporate bonds, a significant upgrade from the previous DMAT 1.0 system. A key feature is the implementation of atomic settlement, where the transfer of securities and payment occur simultaneously, eliminating partial settlements and reducing settlement gaps.
This new system utilizes the Reserve Bank of India's Central Bank Digital Currency (CBDC) for transaction settlements. SEBI Chairman Tuhin Kanta Pandey assured that investors will continue using their existing Demat accounts and depository systems, ensuring a seamless transition.
Furthermore, SEBI is preparing the securities market for the potential impact of quantum computing. The regulator is exploring the adoption of post-quantum cryptography to safeguard against future cryptographic system vulnerabilities, ensuring market readiness.
