India's Securities and Exchange Board (SEBI) has approved a pilot project to tokenize corporate bonds using distributed ledger technology (DLT). Announced by SEBI Chairman Tuhin Kanta Pandey at the CareEdge Debt Market Summit in Mumbai, the initiative aims to enhance liquidity and settlement efficiency in India's debt markets. The pilot will be conducted in stages over six to nine months, with the Reserve Bank of India (RBI) preparing draft guidelines to support the project. The tokenization of corporate bonds is expected to address low secondary-market activity by enabling automated, near-instant settlements and supporting fractional ownership. This could unlock liquidity and broaden investor access, particularly for retail investors. The pilot will operate in a permissioned environment overseen by SEBI and the RBI, distinct from public blockchains. This move comes as India maintains a cautious stance on digital assets, with strict regulations on private cryptocurrencies.