India Taps State-Owned REC for First Tokenised Corporate Bond Issue, Targeting September Launch
India Taps State-Owned REC for First Tokenised Corporate Bond Issue, Targeting September Launch #
India plans to launch its first tokenised corporate bonds as early as next month, according to a Reuters report citing three sources with direct knowledge of the plans.
State-owned power financing company REC Ltd has been identified as the inaugural issuer. The offering is expected to be valued at less than 5 billion rupees (roughly $57 million) and is slated to be announced at a major annual fintech event in Mumbai in September, according to one source. Access at the pilot stage will be restricted to a select group of investors, though the identities of those participants could not be confirmed.
Tokenised bonds are securities where ownership, issuance, trading, and settlement are recorded on a blockchain or distributed ledger. The main advantage is near-instant transaction completion, compared with the multi-day settlement cycles typical of conventional bond markets. Europe and Hong Kong have already adopted the technology for bond issuance and settlement.
India’s securities regulator SEBI and the Reserve Bank of India are coordinating to drive the initiative, according to the Reuters sources. The pilot is expected to use India’s central bank digital currency as the payment mechanism for purchasing the tokenised bonds, connecting the experiment to the RBI’s existing wholesale CBDC infrastructure, which already handles government securities settlement and inter-bank call-money lending.
Part of the groundwork was laid by a 2021 SEBI directive requiring depositories NSDL and CDSL to deploy blockchain-based systems for monitoring bond-covenant compliance and security creation, a technical foundation already in place ahead of many other markets attempting tokenisation. Neither depository responded to Reuters’ queries for comment.
SEBI chairman Tuhin Kanta Pandey first signalled the regulator’s intent publicly at a debt market summit in May, describing the project as an efficiency test built on existing infrastructure rather than a wholesale replacement. India’s corporate bond market holds an estimated ₹59 lakh crore (around $707 billion) in outstanding debt, but secondary trading remains thin. Institutional investors overwhelmingly hold bonds to maturity, and retail participation is negligible. Proponents argue that programmable, near-instant settlement could improve secondary market liquidity over time.
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