India’s state-run REC is set to launch its first tokenised corporate debt sale, leveraging blockchain technology and the Reserve Bank of India’s digital currency to modernise domestic bond issuance and settlement.
India’s state-run REC is set to test a new corner of the bond market next week with what bankers say will be the country’s first tokenised corporate debt sale. The offering, expected to raise as much as 5 billion rupees, would use blockchain technology to record ownership and settlement, a move that places India alongside markets such as Hong Kong and parts of Europe that are already using distributed ledger systems for debt issuance and clearing.
The planned issue will have a one-year-and-eight-month maturity, according to bankers familiar with the transaction. The base size is 1 billion rupees, with a greenshoe option allowing REC to keep up to an additional 4 billion rupees if demand is strong. Bidding is due on Monday, and only investors with active securities wallets and central bank digital currency wallets will be able to participate.
The Reserve Bank of India’s digital currency will be used to buy the bonds, highlighting how India is trying to combine its public debt market with emerging payment infrastructure. Reuters reported last week that the securities regulator and the central bank are working together to promote the technology, with a pilot issue targeted for early September.
REC, which has been active in overseas borrowing, has recently tapped global investors through both dollar and yen bonds. Earlier this year, it raised $500 million through a five-year green bond sale that was oversubscribed, while Indian market reports said the company also raised about JPY 61.1 billion through yen-denominated green bonds. Those transactions underline REC’s access to funding even as it becomes the first Indian borrower to try tokenised domestic corporate bonds.
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