New Delhi, May 26 (IANS) Market regulator Securities and Exchange Board of India (SEBI) has initiated a pilot project to explore tokenisation of corporate bonds using distributed ledger technology (DLT), a move that could enhance liquidity and enable faster settlement in the debt market, SEBI Chairman Tuhin Kanta Pandey said on Tuesday.

Pandey further stated that the pilot is aimed at assessing how blockchain-based systems can improve efficiency in bond trading and settlement, while also addressing associated risks.

“It’s a pilot project that we have decided to initiate on use of DLT for tokenisation of corporate bonds,” Pandey told reporters.

He said corporate bonds in India are already traded on existing platforms, but the regulator is evaluating whether DLT-based tokenisation can further improve market functioning.

“We are saying whether we can use the DLT and tokenisation method for bonds as well. Once you do that, there will be a greater possibility of more liquidity and instantaneous settlement,” he said.

Pandey added that it will help bring together stakeholders and test an operational and technological model before wider implementation.

According to him, the Reserve Bank of India (RBI) has already issued draft guidelines on the subject and is expected to come out with final norms soon. SEBI and exchanges, he said, are ready to roll out the framework once regulatory clearance is received.

On global equity markets, the SEBI chief said investor enthusiasm around artificial intelligence (AI), chips, memory and other electronics linked to AI infrastructure is currently driving valuations across key jurisdictions.

“Some of the leading companies at this moment are those related to AI directly or indirectly,” he said.

On comparisons between India and Taiwan in market capitalisation trends, Pandey said India remains a diversified market, unlike Taiwan, where a few large technology companies dominate valuations.

–IANS

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