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India is preparing its first tokenized corporate bond issuance, pairing blockchain-recorded securities with the wholesale digital rupee in a pilot that could test whether central bank money and tokenized assets can settle simultaneously.
State-owned power financier REC Limited is expected to issue less than 5 billion rupees, or about $57 million, of tokenized bonds in September, according to Reuters, citing three people with direct knowledge of the project. The Reserve Bank of India (RBI) and Securities and Exchange Board of India (SEBI) are working jointly on the initiative.
The amount is small relative to India’s bond market. SEBI data show companies raised 264.7 billion rupees through 603 private placements between April and July 2026 alone. The pilot’s importance therefore lies less in its size than in how the transaction will be settled.
Participants will reportedly need both a wholesale CBDC wallet provided by a bank and a new securities wallet called DEMAT 2.0, being developed by India’s depositories.
The bond itself will be recorded on distributed-ledger infrastructure. Payment will happen in the RBI’s wholesale digital rupee, creating the possibility of delivery-versus-payment in which the security and money change hands together.
That addresses one of tokenization’s recurring weaknesses. Putting a bond on blockchain does little for settlement efficiency if the cash leg still has to move through conventional banking systems.
SEBI whole-time member Amarjeet Singh said this month that the regulator wants its pilot to test faster settlement, simultaneous movement of securities and money, lower reconciliation costs and potentially automated coupon payments and other servicing events.
The initial REC issue will be restricted to selected investors and carry a three-month lock-in period. A secondary market is expected by December. Subsequent trades would require both parties to hold compatible CBDC and securities wallets, and the bonds would sit outside the conventional electronic book provider system during the pilot.
The project also expands the role of India’s wholesale CBDC.
The RBI launched the e₹-W pilot in November 2022, initially allowing nine banks to settle secondary-market government securities transactions in central bank money. It later expanded the experiment to interbank lending and borrowing.
Corporate bonds bring a different challenge because they involve issuers, investors, depositories and securities-market regulation alongside the central bank settlement layer.
India already has substantial conventional corporate-bond infrastructure. SEBI recorded 1.08 million depository transfers worth 13.47 trillion rupees between April and July 2026. In July alone, 316,865 transfers were worth about 4.68 trillion rupees.
Against those numbers, a sub-5-billion-rupee blockchain pilot is effectively a controlled test rather than an attempt to shift the market onchain immediately.
India joins a broader push to connect tokenized securities with regulated digital money.
Hong Kong has tested tokenized bonds and deposits through initiatives involving the HKMA, while Europe has run distributed-ledger settlement experiments under central-bank and securities-market frameworks. India’s approach adds its own infrastructure: the bond sits in a new DLT-based DEMAT wallet while settlement takes place using sovereign digital rupees.
That architecture could ultimately matter more than simply issuing a tokenized bond.
A tokenized security can trade nearly instantly, but settlement still depends on having money available on compatible rails. By putting both the asset and the payment leg into digital infrastructure, India is testing whether tokenization can compress the full post-trade process rather than just digitize ownership records.
There are still major questions. The RBI, SEBI, REC and India’s depositories had not publicly confirmed the final structure when Reuters reported the plan, and the identities of pilot investors remain undisclosed.
September’s $57 million transaction will therefore not prove that India’s corporate bond market can move wholesale onto blockchain. It will test something more basic first: whether a regulated bond and central bank money can move together on new digital rails without recreating the settlement frictions those rails are supposed to remove.
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