India plans first tokenised bond issue in September with REC pilot
By Cygnus | 24 Aug 2026
Summary
India is set to launch its first tokenised corporate bond pilot in September, with state-owned power financier REC Limited expected to issue tokenised bonds worth less than ₹500 crore (about $57 million). The pilot will test blockchain-based issuance and settlement using India’s wholesale central bank digital currency (CBDC), alongside a new electronic securities wallet called DEMAT 2.0.
MUMBAI, August 24, 2026 — India is preparing to launch its first tokenised corporate bond issuance in September, as regulators and market infrastructure institutions test the use of distributed ledger technology for bond issuance, ownership and settlement.
The pilot will be undertaken by state-owned power sector financier REC Limited, placing India among a growing group of financial markets experimenting with blockchain-based bond infrastructure. Tokenised bonds digitally record securities issuance, ownership, trading and settlement on a distributed ledger, potentially allowing transactions to be completed more quickly than through conventional processes.
India’s markets regulator, the Securities and Exchange Board of India (SEBI), and the Reserve Bank of India (RBI) are working together on the initiative, according to people familiar with the discussions who spoke to Reuters on condition of anonymity because the plans remain confidential.
REC is expected to issue tokenised bonds worth less than ₹500 crore (approximately $57 million). The pilot will initially be available only to a select group of investors. Reuters could not ascertain the identities of the participating investors.
The offering is expected to be unveiled at an annual financial technology event in Mumbai in September. The RBI, SEBI and REC did not respond to Reuters requests for comment, while the Indian depositories developing the securities wallet also did not immediately respond to queries.
DEMAT 2.0 and digital rupee settlement
Investors participating in the pilot will need access to two digital accounts.
- A wholesale CBDC wallet: A digital currency wallet provided through a bank and used to hold and transact in India’s wholesale central bank digital currency.
- DEMAT 2.0 securities wallet: A new electronic securities wallet being developed by Indian depositories to record tokenised bond holdings on distributed ledger technology.
The two-wallet structure is intended to connect the digital currency used for payment with the digital securities representing the bonds. Subsequent trades are expected to be limited to participants holding compatible CBDC and securities wallets.
The use of the RBI’s wholesale CBDC is intended to enable faster settlement of transactions involving the tokenised securities. However, the detailed technical mechanics of the settlement process have not been publicly disclosed.
Secondary market expected by December
The pilot tokenised bonds will not be traded through the conventional Electronic Book Provider (EBP) platform, according to the sources cited by Reuters.
The bonds will carry an initial three-month lock-in period. Indian exchanges are expected to develop a secondary market for the tokenised securities by December 2026, although the final structure and operating arrangements have not been publicly announced.
The pilot forms part of wider efforts to modernise India’s corporate bond market through digital financial infrastructure. A successful trial could provide regulators and market participants with experience in using distributed ledger technology for the issuance, holding and subsequent trading of debt securities.
Why this matters
- India’s first tokenised corporate bond pilot: The REC transaction would mark a significant test of blockchain-based bond issuance and settlement in India.
- Wholesale CBDC integration: The pilot will use India’s wholesale CBDC as part of the transaction process, linking digital currency infrastructure with tokenised securities.
- New securities wallet: DEMAT 2.0 is being developed to record tokenised bond holdings on a distributed ledger, creating a new digital custody mechanism for the pilot.
- Potential secondary-market development: A secondary trading framework expected by December could determine whether tokenised bonds can move beyond a limited pilot into broader market infrastructure.
FAQs
Q1: What is India’s upcoming tokenised bond pilot?
India plans to launch its first tokenised corporate bond issuance in September 2026. The pilot will use distributed ledger technology to record bond holdings and will incorporate the RBI’s wholesale CBDC into the transaction process.
Q2: Which entity will issue the inaugural tokenised bonds?
State-owned power sector financier REC Limited is expected to issue tokenised bonds worth less than ₹500 crore, or approximately $57 million.
Q3: How will investors participate?
Investors in the pilot will need access to a wholesale CBDC wallet provided through a bank and a new electronic securities wallet known as DEMAT 2.0.
Q4: What is DEMAT 2.0?
DEMAT 2.0 is a new electronic securities wallet being developed by Indian depositories to record tokenised bond holdings using distributed ledger technology. Reuters reported that the initiative involves India’s securities depositories, NSDL and CDSL.
Q5: When will secondary trading for tokenised bonds begin?
The pilot bonds will have an initial three-month lock-in. Indian exchanges are expected to develop a secondary market for the tokenised bonds by December 2026.