India is preparing a September pilot for its first tokenized corporate bonds, according to a Reuters report that cited three people with direct knowledge of the plan. State-controlled REC Limited is expected to issue less than 5 billion Indian rupees, or about $57 million, in tokenized debt as part of the trial. The program would initially be limited to a select group of investors and could be introduced at an annual financial technology event in Mumbai.
The report said India’s central bank digital currency would be used to purchase the bonds. Investors would need two digital accounts to take part: a wholesale CBDC wallet provided by a bank and a new electronic securities wallet. Indian securities depositories are developing that wallet under the name DEMAT 2.0, which would record bond holdings on distributed ledger technology. Reuters also reported that the Reserve Bank of India and the Securities and Exchange Board of India are working together on the initiative. The bonds are expected to carry an initial three-month lockup period, while exchanges may build a secondary market for the instruments by December.
India is preparing to test tokenized corporate bonds in September, with blockchain-based transactions to be settled using a central bank digital currency, according to a Reuters report that cited three people with direct knowledge of the plans.
Under the proposed pilot, REC Limited, a state-controlled Indian power infrastructure finance company, plans to issue less than 5 billion Indian rupees in tokenized bonds, equivalent to about $57 million. The trial would initially be limited to a select group of investors and could be unveiled at an annual financial technology event in Mumbai in September.
Wholesale CBDC to be used for bond purchases
Reuters, citing one of the sources, said India’s central bank digital currency would be used to buy the tokenized bonds. Investors would need two digital accounts to participate: a wholesale CBDC wallet provided by a bank and a new electronic securities wallet.
DEMAT 2.0 wallet under development
Indian securities depositories are developing the new wallet, called DEMAT 2.0, to record bond holdings using distributed ledger technology.
According to Reuters, the Reserve Bank of India, or RBI, and the Securities and Exchange Board of India, or SEBI, are working together on the initiative.
Three-month lockup, secondary market targeted by December
The bonds are set to carry an initial three-month lockup period. Exchanges are expected to develop a secondary market for the tokenized bonds by December.
No response yet from RBI, SEBI and REC
Cointelegraph said it contacted the RBI, SEBI and REC for comment on the reported plans but had not received responses at the time of publication.
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