India to launch its first tokenized bond with REC’s $57 million pilot in September

India is expected to launch its first tokenized corporate bond pilot in September 2026 through state-owned power financier REC, with the proposed issuance valued at less than ₹5 billion, or roughly $57 million, Reuters reported, citing three sources with direct knowledge of the discussions.

The project will test whether distributed ledger technology can improve the way corporate debt is issued, recorded and settled. The planned offering is expected to be introduced during an annual financial technology event in Mumbai next month.

Digital rupee will power India’s tokenized corporate bonds

A key feature of India’s tokenized corporate bonds initiative is the planned use of the RBI’s wholesale central bank digital currency, or digital rupee, for the cash side of transactions.

Investors participating in the pilot are expected to require two separate digital accounts. The first would be a wholesale digital rupee wallet provided through a bank. The second would be a securities wallet designed to hold the tokenized bonds.

Indian depositories are reportedly developing the securities infrastructure under the name DEMAT 2.0. The system is intended to record bond ownership through distributed ledger technology, creating a digital record of securities holdings and transfers.

This structure is significant for crypto and blockchain investors because it demonstrates a use of distributed ledgers within a regulated capital market rather than in a conventional cryptocurrency trading environment.

The planned design could allow the movement of securities and money across connected digital systems with near-immediate settlement. It would also test whether bond transactions can be completed without relying on the traditional electronic book provider system used for debt placements.

REC pilot could reshape India’s bond settlement

For investors watching India’s tokenized corporate bonds, the proposed three-month lock-in period will be another important element of the experiment.

The bonds are expected to remain locked for three months after issuance. Exchanges could then establish a secondary market for the securities by December, allowing eligible investors to trade the tokenized bonds after the initial restriction expires.

The secondary market would remain limited by the infrastructure requirements. Investors would need compatible digital rupee and securities wallets to participate in subsequent transactions.

The experiment therefore goes beyond simply placing a traditional bond on a blockchain. It is designed to test whether the cash and securities sides of a transaction can operate through interconnected digital infrastructure.

SEBI had already laid regulatory groundwork for distributed ledger technology in corporate bond trading and settlement earlier this year. Its chairman, Tuhin Kanta Pandey, previously said the regulator had approved a limited DLT test and that the RBI was developing the necessary guidelines.

What India’s tokenized corporate bonds mean for crypto investors

The importance of India’s tokenized corporate bonds extends beyond the relatively modest size of the REC offering.

Tokenization converts ownership of an underlying regulated financial asset into a digital representation recorded on distributed ledger infrastructure.

In this case, the underlying asset remains a regulated corporate bond; the blockchain component is being used to record and transfer ownership.

The pilot shows how blockchain technology can be incorporated into a regulated financial system while the country maintains a more cautious stance toward speculative digital assets.

The RBI began its wholesale CBDC experiment in 2022, initially using the digital rupee for government securities settlement. The proposed REC transaction would extend that experiment into corporate debt issuance and combine central-bank digital money with tokenized securities.

The success or failure of the pilot may influence how regulators, banks, exchanges and financial institutions evaluate tokenized real-world assets.

At the same time, investors should distinguish the project from a public crypto launch. Access is expected to be restricted, the bonds will remain regulated securities, and the infrastructure will operate under India’s financial-market framework.

If the pilot performs as intended, India’s tokenized corporate bonds could become an early demonstration of how blockchain-based securities and central-bank money can work together.

The December secondary-market target will provide another test of whether the technology can move beyond issuance and into ongoing trading.

For now, India’s tokenized corporate bonds remain a controlled experiment rather than a wholesale transformation of the country’s bond market. But the combination of REC debt, the digital rupee and distributed ledger technology gives the pilot significance for investors tracking the wider global tokenization trend.