India is set to pilot its first tokenised corporate bond using blockchain and CBDC technology, aiming to modernise its debt market with near-instant settlement and enhanced traceability, in a move that could reshape bond trading in the country.
India is preparing to test its first tokenised corporate bond in September, with state-owned REC Limited expected to lead the pilot and issue less than ₹500 crore, or about $57 million, of debt. The experiment, which is set to be unveiled at a financial technology event in Mumbai, would use blockchain for issuance, ownership, trading and settlement, according to reports from Indian Web2 and other publications.
The pilot is notable because settlement would take place in the Reserve Bank of India’s wholesale central bank digital currency, known as e₹-W, rather than through the conventional banking system. Investors taking part in the test would need both a wholesale CBDC wallet and a DEMAT 2.0 securities wallet, with access restricted to a limited group of institutional investors. That structure is designed to show how tokenised bonds could combine regulated securities with distributed ledger technology while keeping the process within India’s existing market framework.
In practical terms, the proposal aims to replace the slower reconciliation process used in traditional bond markets with near-instant settlement recorded on a shared digital ledger. According to the material released around the pilot, that could improve traceability and make coupon payments and other servicing tasks easier to automate. The bond would still be a regulated security, but its ownership and settlement records would be logged on blockchain rather than handled only through conventional depositories.
The pilot also reflects how India is trying to modernise its debt market in step with experiments already seen in Europe and Hong Kong. Reuters reported in August that REC was expected to be the issuer, while Livemint said the initial launch would be limited to select investors and could eventually inform wider market use if the infrastructure matures. Even so, the project remains a test case: officials and market participants still need to assess how the system handles scale, cybersecurity and regulatory coordination between the Securities and Exchange Board of India and the central bank.
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