India is set to launch its first tokenized corporate bond pilot as early as next month, with state-owned power financier REC Limited expected to issue less than 5 billion rupees, or about $57 million, in bonds. The transaction would use the Reserve Bank of India’s wholesale digital rupee to settle on blockchain-based infrastructure, according to Reuters sources with direct knowledge of the plans.
The issue is being developed with the Reserve Bank of India (RBI) and the Securities and Exchange Board of India (SEBI), and is expected to be unveiled during an annual financial technology event in Mumbai. Access will initially be limited to a select group of investors while regulators test the system.
Participants would need two digital accounts: a wholesale CBDC wallet supplied by a bank and a securities wallet being developed by Indian depositories under DEMAT 2.0. Ownership and transaction records would be maintained on distributed ledger technology, allowing money and securities to move across connected digital infrastructure and settle almost immediately.
The bonds will carry a three-month lock-in period, and exchanges are expected to develop a secondary market for tokenized bonds by December. The structure is designed to bypass the conventional electronic book provider system used for debt placements, testing whether DLT can shorten issuance, recording and settlement of corporate debt.
SEBI had already approved a limited DLT pilot for corporate bond trading and settlement in May, with Chairman Tuhin Kanta Pandey estimating implementation could take six to nine months. The latest plan identifies REC as the first issuer and the wholesale digital rupee as the cash leg of the transaction, while National Securities Depository Limited and Central Depository Services Limited are involved in the DEMAT 2.0 infrastructure.
India’s corporate bond market is estimated at nearly 59 lakh crore rupees, but secondary activity remains limited because many institutional buyers hold debt to maturity and retail participation is low. The RBI has also sought to distinguish regulated tokenization from private cryptocurrencies, recommending that banks and payment systems remain insulated from speculative digital assets while allowing tokenized government and corporate securities to proceed.
The corporate bond pilot is part of a wider Indian push into regulated tokenization. The RBI launched its wholesale CBDC pilot in November 2022 and a retail pilot in December 2022, and by October 2025 had extended testing to a CBDC-linked deposit pilot. Separately, Maharashtra has proposed legislation for tokenized land assets, with an expert committee including SEBI and Indian stock exchanges.
Although the pilot highlights blockchain’s potential to improve capital-market efficiency, it also underscores the difference between permissioned, state-controlled digital money and open cryptocurrencies such as Bitcoin. A wholesale CBDC remains under central-bank control and can embed institutional rules into the payment layer, while the pilot’s restricted wallet requirements may narrow participation.
