India launches tokenized bond pilot with $107M issued
India launches tokenized bond pilot
India’s securities regulator SEBI and the Reserve Bank of India have started a pilot that lets corporate bonds be issued and held as digital tokens on a distributed ledger. The first three issuers raised a total of about 10.25 billion rupees (≈ $107 million).
Key facts
- REC, a public‑sector lender, sold 5 billion rupees of bonds to 18 investors.
- Larsen & Toubro raised 5 billion rupees from four investors.
- IIFL issued 250 million rupees to one investor.
- The tokens are stored in existing Demat accounts; no new account or KYC is required.
- Settlement uses RBI’s wholesale central bank digital currency (CBDC) through a Unified Market Interface.
Regulator details
SEBI said the new “Demat 2.0” platform lets issuers receive funds on the same day as bidding, removing the usual two‑to‑three‑day delay. Atomic settlement links the movement of cash and the bond token, while smart contracts can automate interest and redemption payments.
Additional context
Earlier reports indicated the pilot would involve only REC with a smaller amount. The launch was expanded to include L&T and IIFL, more the total issuance to more than double the original estimate.
What is confirmed
- The pilot is live and three companies have issued tokenized bonds.
- The total issuance is 10.25 billion rupees (≈ $107 million).
- SEBI and RBI are the overseeing the platform and CBDC settlement.
What is still unclear
- Exact timeline for introducing secondary trading and retail investor access.
- How many participants will adopt the wholesale CBDC wallet requirement.
Why it matters
India becomes the first country to combine blockchain‑based bond issuance, statutory depository ownership records, and CBDC settlement within its regulated market. The pilot could show how digital tokens speed up bond settlement and reduce costs.
Next steps
SEBI said later phases will add secondary trading through existing request‑for‑quote platforms and will allow retail investors to participate. The regulator will use experience from the pilot to shape any wider rollout.
