India to launch first tokenized corporate bonds using digital rupee

India is set to issue its first tokenized corporate bonds in a pilot led by state‑owned power financier REC. The offering, worth less than 5 billion rupees (about $57 million), will be settled using the Reserve Bank of India's wholesale digital rupee on a distributed‑ledger infrastructure.

Pilot structure and timeline

Investors will need two digital wallets: a wholesale CBDC wallet supplied by a bank for the cash leg, and a DEMAT 2.0 securities wallet for the tokenized bonds. The bonds will carry an initial three‑month lock‑in period, after which a secondary market is expected to launch by December.

Regulatory involvement

The pilot is being developed jointly by the RBI, SEBI and REC. Access will be limited to a select group of investors while regulators test the settlement process. The initiative follows earlier SEBI approvals for distributed‑ledger testing in corporate bond trading.

Technology and settlement

Ownership and transaction records will be maintained on a blockchain, allowing near‑instant settlement once assets move between participants. The DEMAT 2.0 system will record bond holdings using distributed‑ledger technology, and subsequent trades will be possible only between participants equipped with compatible wallets.

Broader context

India’s tokenization efforts are part of a wider regulatory push to separate regulated tokenized assets from private cryptocurrencies. The RBI has been running wholesale and retail digital rupee pilots since 2022, and other tokenization projects, such as land‑registry tokenisation in Maharashtra, are also under development.