India to pilot tokenized bond issuance using wholesale CBDC

India is preparing to launch its first pilot issuance of tokenized corporate bonds, valued at less than 5 billion rupees (approximately $57 million). The issuance will be conducted by the state-owned power financier REC.

The project utilizes distributed ledger technology (DLT) to facilitate near-instantaneous issuance, transaction recording, and settlement. Payments for the bonds will be executed using the Reserve Bank of India’s wholesale central bank digital currency (CBDC). This initiative is a collaborative effort between the Reserve Bank of India (RBI) and the Securities and Exchange Board of India (SEBI).

To participate, investors will require access to two digital accounts: a wholesale CBDC wallet provided by a bank and a new electronic securities wallet. Indian depositories are currently developing a system known as DEMAT 2.0 to record ownership directly on the DLT network. During this pilot phase, access to the offering will be restricted to a select group of market participants. A secondary market for these tokenized bonds is expected to be developed by December.