REC Limited is preparing to issue India’s first tokenized corporate bond worth approximately $57 million, or just under 5 billion rupees. The state-owned power infrastructure financing company has scheduled the launch of the new debt instrument under a pilot program this coming September. The planned issuance will run on blockchain technology with a transaction settlement system relying entirely on central bank digital currency (CBDC).
The initial phase of the rollout will follow a closed pilot format involving only a select group of investors. The framework and technical details regarding the tokenized bond structure will be publicly unveiled during an annual financial technology exhibition in Mumbai this September.
Dual Digital Wallet Requirement
Purchasing the tokenized bonds requires settlement via wholesale CBDC - a digital rupee version dedicated to high-value institutional transactions. Participation in the pilot program demands that buyers prepare a dual-layer digital account infrastructure.
The first required account is a wholesale CBDC wallet issued by commercial banks to hold settlement funds. The second is a dedicated electronic securities wallet. Indian securities depositories are currently developing a next-generation registry system named DEMAT 2.0, tasked with deploying distributed ledger technology to record and track the ownership of each bond.
Central Bank and Securities Regulator Collaboration
The Reserve Bank of India (RBI), the nation’s central bank, is overseeing the innovation project alongside the Securities and Exchange Board of India (SEBI), the country’s securities regulator. Both financial watchdogs are collaborating to build a direct bridge between digital payment systems and securities ownership recording rails.
Asset ownership rules establish an initial lockup period of three full months from the issuance date. Once the holding period expires, the market regulator aims to develop dedicated secondary market infrastructure to accommodate tokenized bond trading by December 2026 at the latest.
The use of the digital rupee framework for bond settlement marks a new milestone for the world’s fifth-largest economy in driving CBDC adoption into the core operations of conventional capital markets. Reported by Cointelegraph.
Read also: What Is DeFi (Decentralized Finance)?
Disclaimer: This article is for informational and educational purposes only, not financial advice. Cryptocurrency assets are highly volatile and carry significant risk. Always do your own research (DYOR) and never invest more than you can afford to lose.
