India is set to launch tokenised corporate bonds in September 2026, with state-owned power financier REC expected to issue the bonds for the first time. According to Reuters, the pilot will initially be limited to select investors and will involve a three-month lock-in period. The initiative uses blockchain technology and wholesale CBDC for faster settlement, marking a significant step in India's digital finance evolution. As reported by Mint, SEBI first announced this pilot publicly in May, stating that implementation could take six to nine months on a limited scale. Reuters sources confirm the offering will be launched at an annual financial technology event in Mumbai next month. The notes will be issued by REC—a government-owned financier—and are intended to position India alongside major markets such as Europe and Hong Kong. NDTV reports that the proposed REC issue is expected to be below ₹500 crore, making it a significant milestone in India's financial digitisation journey.
The tokenised bonds will operate through a two-wallet system requiring both wholesale digital currency wallets for CBDC payments and new securities wallets called DEMAT 2.0 for distributed ledger record-keeping. According to Mint reports, the ownership record sits on a distributed ledger while payments move through the Reserve Bank's wholesale digital rupee, different from the retail Digital Rupee app used by the public. Vikaas M Sachdeva, CEO of BitDelta India, explained that the underlying instrument remains a conventional bond with the same credit exposure, interest payments, and principal repayment, but the ownership and settlement infrastructure changes to enable faster settlement. NDTV reports that investors may need separate digital wallets for the currency and securities sides of the transaction, making the pilot more than just a blockchain experiment. The success of the exercise cannot be measured only by whether a bond is issued faster, as it will test how existing financial infrastructure interacts with digital assets. Manhar Garegrat, Country Head of Liminal Custody, noted that institutional custody has moved beyond simply holding an asset, requiring infrastructure that connects digital representation to underlying assets, defines transaction permissions, ensures proper segregation, and provides recovery mechanisms when things go wrong.
The September pilot is expected to involve REC and be available only to a select group of investors, not structured as a broad retail offering. As reported by Mint, retail eligibility criteria and minimum investment amounts have not been announced. Reuters sources confirm that REC will issue bonds worth less than ₹5 billion ($57 million) in the offering, and the country's central bank digital currency—the digital rupee—will be used to buy tokenized bonds. NDTV reports that the proposed REC issue is expected to be below ₹500 crore, making it a significant milestone in India's financial digitisation journey. Nishchay Nath, Founder & CEO of BondScanner, noted that the first Indian issuance is a pilot and is expected to be restricted to a select group of investors, emphasizing it should not be viewed as a retail launch yet. Secondary trading in tokenised bonds is expected to happen through exchanges only between participants who hold compatible wallets, after the reported lock-in period.
According to Mint reports, India starts from a stronger base than many markets attempting this technology, since NSDL and CDSL have run blockchain-based systems for bond-covenant monitoring since 2021 and became operational in 2022. Manhar Garegrat, Country Head of Liminal Custody, noted that India's REC issuance is one of the few notable corporate bond offerings alongside the Siemens corporate bond in Germany and the Keyrock on-chain corporate bond in Switzerland. The benefits could include higher retail participation in debt instruments and higher liquidity for investors to make timely exits. NDTV reports that tokenisation allows fractional ownership of traditionally difficult-to-divide assets like houses, government bonds, or mutual funds, potentially opening products to wider investor pools. Reuters sources indicate that the notes are intended to position India alongside major markets such as Europe and Hong Kong in blockchain-based financial technology. This initiative aligns with broader global trends, as Japan is also advancing blockchain finance through plans for instant stock and government bond settlement, while Thailand is proposing digital currency ETFs.
India currently lacks a dedicated legal framework for asset tokenisation, while the IFSCA's consultation approach is designed to recognise digital tokens representing ownership or beneficial interests and build mechanisms for issuance, trading, custody, clearing, and settlement. Industry and legal analysis places India's tokenisation market at around USD 3 billion, with a projection of USD 100 billion by the end of the decade, implying more than 30x growth potential from that base, as reported by FinanceFeeds. Reuters reports that the country's central bank digital currency—the digital rupee—will be used to buy tokenized bonds, indicating strong regulatory support for the initiative. The practical design response includes jurisdiction-aware transfer logic, cooling-off controls where required, disclosure workflows, permissioned distribution, and clear recovery procedures. No smart contract substitutes for a legal opinion or licensed intermediary, as smart contracts can handle issuance, ownership updates, covenant tracking, and servicing events but cannot police beneficial ownership across wallets, enforce off-chain covenants, or replace regulators.
