Exclusive-India plans first tokenised bond issue in September, sources say
Non-U.S. Govt. Debt
India is set to launch its first tokenized corporate bonds next month, marking a significant step in integrating blockchain technology into the nation's financial infrastructure. State-owned power financier REC will lead the pilot issuance, offering bonds valued at less than 5 billion rupees, or approximately $57 million. This initiative, supported by the Reserve Bank of India and market regulators, aims to enable near-instant settlement of bond transactions. Investors will utilize a wholesale central bank digital currency (CBDC) wallet alongside a new electronic securities wallet, known as DEMAT 2.0, to manage holdings on a distributed ledger. The pilot will initially be restricted to a select group of investors, with a three-month lock-in period for the securities. By bypassing traditional electronic book provider platforms, the project seeks to modernize the issuance and trading lifecycle. This move aligns India with global markets like Hong Kong and Europe that are actively exploring blockchain-based securities. A secondary market for these tokenized assets is expected to be developed by December.
Key points
- ▸REC to issue tokenized corporate bonds worth under 5 billion rupees ($57 million).
- ▸Transactions require both a wholesale CBDC wallet and a DEMAT 2.0 securities wallet.
- ▸Pilot program features a three-month lock-in period for initial bondholders.
- ▸Secondary market development for tokenized bonds is targeted for completion by December.
Background
REC Limited is a state-owned infrastructure finance company in India that specializes in power sector financing. Tokenized bonds represent a digital transformation of traditional debt securities, where ownership and settlement are managed via distributed ledger technology rather than legacy clearing systems. This process reduces counterparty risk and settlement times by automating the transfer of assets and payments.
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