Tokenisation of corporate bonds: A new chapter for India’s debt market
India is set to launch its inaugural tokenized corporate bond issuance in September 2026, featuring state-owned power financier REC Ltd. as the primary issuer. The pilot project will utilize Distributed Ledger Technology (DLT) alongside the Reserve Bank of India’s wholesale Central Bank Digital Currency (CBDC) to facilitate transaction settlement. SEBI Chairperson Tuhin Kanta Pandey highlighted that this initiative aims to test DLT for faster settlement, improved traceability, and automated servicing within the corporate bond market. By integrating securities and payment legs onto an interoperable digital infrastructure, the project seeks to reduce settlement risk and operational reconciliation burdens. While India already maintains a mature dematerialized securities system, this shift represents a transition toward a more programmable and integrated financial architecture. The pilot will also serve as a critical test case for addressing complex legal questions regarding the finality of DLT-based ownership records. Ultimately, this move signifies a strategic evolution in India's financial market infrastructure, potentially enhancing liquidity and retail accessibility for debt instruments.
- REC Ltd. will issue tokenized corporate bonds under INR 500 crore in September 2026.
- The pilot integrates DLT with the Reserve Bank of India’s wholesale CBDC for settlement.
- SEBI aims to evaluate DLT for enhanced transparency, automated servicing, and reduced settlement risk.
- The initiative marks a shift from electronic record-keeping to programmable, integrated digital infrastructure.
REC Ltd. is a state-owned power sector financier in India that provides long-term loans and other financial products for power infrastructure projects. The Indian corporate bond market currently relies on a centralized depository system where securities are held in dematerialized form and settled through traditional financial market infrastructure.