India’s First Tokenized Corporate Bond: The REC Issue – Explained
RWA Signal Insight
InfrastructureOn September 7, 2026, REC, a state-owned power sector lender in India, successfully raised ₹500 crore through the country's first tokenized corporate bond. Executed under a regulatory sandbox overseen by the Securities and Exchange Board of India (SEBI), the pilot utilized a shared digital ledger to achieve atomic delivery versus payment. By integrating the Reserve Bank of India's wholesale digital rupee, the transaction enabled simultaneous settlement, eliminating the traditional time gaps and reconciliation efforts associated with legacy bond trading. The bond, which carries a 7.30% coupon, saw a subscription rate 1.6 times the base size, with participation from major institutions including HDFC Bank and ICICI Bank. Following this success, Larsen & Toubro issued a similar ₹500 crore bond, bringing the total pilot volume to ₹1,000 crore. While the scale remains small relative to the broader corporate bond market, the initiative demonstrates the viability of blockchain-based infrastructure for institutional debt. This development marks a significant shift in market plumbing, as regulators and major financial entities test the efficiency of digital securities within a controlled environment. The future of this asset class in India now depends on the formalization of rules and the potential expansion of investor access beyond the current institutional pilot.
Key points
- REC raised ₹500 crore in India's first tokenized corporate bond with a 7.30% coupon.
- Atomic settlement was achieved using the Reserve Bank of India's wholesale digital rupee.
- Larsen & Toubro followed the REC pilot with an additional ₹500 crore tokenized issuance.
- The SEBI-led sandbox pilot involved approximately 20 institutional buyers, including HDFC and ICICI Bank.
Background
REC (formerly Rural Electrification Corporation) is a state-owned infrastructure finance company in India that focuses on power sector projects. The company operates as a non-banking financial company (NBFC) and is a major issuer of corporate debt in the Indian capital markets. Tokenized bonds represent a digital evolution of these traditional debt instruments, where ownership and transfer records are maintained on a distributed ledger rather than through legacy depository systems.