India plans to launch its first tokenized corporate bond in September through state-owned power financier REC. The proposed issue will total less than 5 billion rupees, or about $57 million, according to sources familiar with the plans.
The pilot will use blockchain or distributed ledger technology to record issuance, ownership, trading and settlement. It will also use India’s wholesale central bank digital currency for payment. The project uses regulated bonds and CBDC infrastructure. It does not involve sovereign investment in Bitcoin.
REC Prepares Tokenized Bond Pilot
REC is expected to present the offering during an annual financial technology event in Mumbai next month. The first phase will serve a restricted investor group while regulators assess the new settlement process. The sources requested anonymity because discussions remain confidential.
The central bank and securities regulator are working together on the framework, the sources said. Their cooperation covers how the bond moves against digital payment within the pilot.
“The offering would be made available to only a select group of investors at the pilot stage,” one source said. Reuters could not identify those investors. The Reserve Bank of India, the Securities and Exchange Board of India and REC did not respond to requests for comment.
Two Digital Wallets Will Support Settlement
Investors will need two compatible digital accounts to access the tokenized corporate bond. A bank will provide a wholesale digital rupee wallet for payment. Investors will also require a new electronic securities wallet that records their bond holdings on a distributed ledger.
Indian depositories are developing the securities wallet under the name DEMAT 2.0. The system will connect the cash and asset sides of each transaction. This structure aims to complete transfers almost immediately once participants meet the required conditions.
The pilot will test whether linked wallets can reduce the time between a completed trade and final settlement. The sources did not provide details about pricing, the interest rate, maturity or participating banks for the planned bond at this stage.
“Subsequent trades can take place only between participants that hold both compatible CBDC and securities wallets,” another source said. The restriction means investors cannot use the pilot through standard bond accounts alone.
Tokenized Bond Lock-In Shapes Secondary Trading
The bonds will carry an initial three-month lock-in period. Exchanges expect to develop a secondary market for the securities by December. The bonds will not trade through the conventional electronic book provider platform used for many corporate debt placements in India.
Tokenized bonds represent conventional debt in digital form. Their blockchain records can track issuance, ownership changes and settlement within one system. Europe and Hong Kong have already tested or issued similar instruments, placing India’s planned pilot within a wider shift toward digital market infrastructure.
The project differs from government ownership of Bitcoin. India has not announced a strategic Bitcoin reserve or disclosed sovereign Bitcoin holdings. Its reserve framework focuses on liquidity, safety and returns, with foreign currency assets and gold forming the main holdings.
India has millions of private cryptocurrency users, although personal adoption does not determine sovereign reserve policy. Authorities have maintained separate approaches toward crypto assets, the digital rupee and distributed ledger systems used in regulated financial markets.
The planned REC issue therefore centers on bond settlement rather than cryptocurrency investment. The wholesale CBDC will provide the payment leg, while DEMAT 2.0 will record the security. Both wallets must work together before investors can complete later trades.
ALSO READ: Indian Crypto Trading Volumes Surge as Bitcoin Moves Closer to $80,000
Disclaimer : Crypto News India does not recommend that any cryptocurrency should be bought, sold, or held by you. Do conduct your own due diligence and consult your financial advisor before making any investment decisions.
