India to Launch First Tokenised Corporate Bond Offering in September

India is preparing to launch its first tokenised corporate bond offering next month, with state owned power financier REC set to issue notes worth less than 5 billion rupees, according to sources familiar with the matter. The move would place India among markets like Europe and Hong Kong that already use blockchain technology for bond issuance and settlement.

Central Bank Digital Currency to Power Purchases

The pilot program will use India’s central bank digital currency for bond purchases, requiring investors to hold both a digital currency wallet and a newly developed electronic securities wallet called DEMAT 2.0, which records bond ownership on a distributed ledger. The offering will initially be limited to a select group of investors as authorities test the framework.

Secondary Market Expected by Year End

The tokenised bonds will carry an initial three-month lock-in period, with exchanges expected to develop a secondary trading market by December. Unlike traditional bonds, these securities will not trade on conventional electronic platforms, reflecting India’s cautious, phased approach to blockchain-based debt instruments as regulators and the central bank collaborate on the initiative.