India Plans to Issue First Tokenized Bond Exceeding $57 Million in September

India plans to issue its first tokenized bond in September, to be issued by the state-owned Power Finance Corporation (REC), with an expected issuance size of less than 5 billion rupees (approximately $57 million). Market regulators and the central bank are promoting related pilot projects, and the bond issuance and settlement will utilize blockchain technology. This product is expected to be launched during the annual fintech conference in Mumbai in September, initially targeting a limited number of investors. Investors will participate through wholesale central bank digital currency (CBDC) wallets and electronic securities wallets. The Indian depository institution is developing an electronic wallet named DEMT 2.0 to record bond holdings via a distributed ledger. The initial term of the bond will be three months, and subsequent trading will be limited to participants holding compatible CBDC and securities wallets. A secondary market for tokenized bonds is expected to form by December, and these bonds will not be traded on traditional electronic trading platforms.

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