SEBI Whole-Time Member Amarjeet Singh said the project would examine whether shared data can improve bond market operations. Tokenisation represents a bond as a digital token held on a secure network. The aim is to upgrade the existing market, rather than create a separate one.

A key test is whether ownership of a bond and the corresponding payment can move together at the same instant. This could speed up settlement and lower the cost of matching records for banks and brokers. Smart contracts—programs that execute predefined instructions—will also be tested for paying bond interest automatically when it falls due.

Separately, SEBI is seeking to strengthen corporate bond repos, where daily trading is around ₹6,000 crore, below 1% of India's overall repo volumes. It is discussing obstacles beyond its remit with other authorities. With roughly 33,000 bond instruments across 7,200 issuers, the regulator is also examining fewer, larger benchmark issues, issuer buybacks and stronger liquidity support.

For retail access, SEBI plans distribution rules allowing Online Bond Platform Providers to engage certified channel partners, including mutual fund distributors. Partners would require NISM certification. A bond risk-o-meter is also being developed, and a consultation paper on distribution is expected soon. The report gives no specific date for the paper or the pilot's completion.