India to Launch First Tokenized Corporate Bonds in September

India is preparing to launch its first tokenized corporate bonds in September, a pilot project that will test the use of blockchain technology for instant settlement of bond transactions using the country's central bank digital currency. The initiative, led by state-owned power financier REC Limited, marks a significant step in integrating distributed ledger technology into the nation's mainstream financial infrastructure.

According to three sources with direct knowledge of the matter, REC will issue tokenized bonds worth less than 5 billion Indian rupees, approximately $57 million. The offering is expected to be unveiled at an annual financial technology event in Mumbai in September. The pilot is being developed in collaboration with the Reserve Bank of India and the Securities and Exchange Board of India, though the central bank, the markets regulator, and REC did not respond to requests for comment.

The project is designed to test whether distributed ledger technology can streamline the process of issuing, recording, and settling corporate debt. To participate, investors will need two separate digital accounts: a wholesale central bank digital currency wallet provided by a...