India is preparing to launch its first tokenized bond in September, according to Reuters, in a pilot tied to the country’s push to test blockchain-based capital market infrastructure. The bond is set to be issued by state-owned power sector financier REC, with an expected size of less than 5 billion rupees, or about $57 million.
The pilot is being advanced jointly by India’s market regulator and central bank, and both issuance and settlement are expected to run on blockchain rails. People familiar with the matter said the product is likely to be unveiled during an annual fintech conference in Mumbai in September, with access limited to a small group of investors at the outset.
Investors are expected to participate through wholesale central bank digital currency wallets and electronic securities wallets. India’s depository institution is also developing an e-wallet called DEMT 2 to record bond ownership on distributed ledger infrastructure. The bond will carry an initial tenor of three months. Secondary trading is expected to be limited to participants holding both compatible CBDC and securities wallets, with a tokenized bond secondary market projected by December. The bond is not expected to trade on traditional electronic trading platforms.
India plans to issue its first tokenized bond in September, according to Reuters, with state-owned power sector financier REC set to act as the issuer. The planned deal is expected to be less than 5 billion rupees, or about $57 million.
The pilot is being pushed forward jointly by India’s market regulator and the central bank. Bond issuance and settlement will use blockchain technology. People familiar with the matter said the product is expected to be introduced during an annual fintech conference in Mumbai in September, and it will initially be offered only to a limited group of investors.
Investor access and wallet structure
Investors will take part through wholesale central bank digital currency, or CBDC, wallets and electronic securities wallets. India’s depository institution is developing an electronic wallet known as DEMT 2, which will be used to record bond holdings through distributed ledger technology.
Tenor and secondary market plans
The bond will have an initial tenor of three months. Secondary trading will be limited to participants that hold both compatible CBDC wallets and securities wallets. India is expected to form a secondary market for tokenized bonds by December, and the instrument will not trade on traditional electronic trading platforms.
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