India's First Tokenized Bond
State-owned REC Ltd issues India's first tokenized corporate bond worth ₹500 crore.
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Key Points
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The pilot was restricted to qualified institutional investors, who needed access to both Demat 2.0 securities accounts and RBI wholesale CBDC wallets. The restriction was intended to contain risk while giving regulators data before any broader rollout.
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The transaction did not involve publicly traded crypto assets: the ledger is permissioned and operates within the regulatory oversight of SEBI and the RBI.
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About 20 investors participated, including Axis Bank, Yes Bank, AK Capital Services, ICICI Securities Primary Dealership, Taurus Group and Trust Investment Advisors, in addition to HDFC Bank and ICICI Bank.
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Taurus Group founder Amar Gandhi said linking tokenized securities with central-bank-digital-currency payments could make allotment and settlement “significantly faster.”
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The pilot involved not only SEBI and the RBI but also market-infrastructure institutions including NPCI, depositories and stock exchanges. Larsen & Toubro was separately seeking bids for three-year tokenized notes worth as much as ₹500 crore, suggesting possible follow-on issuance in the market.
State-owned REC Ltd. has issued India's first tokenized corporate bond, raising ₹500 crore under the Securities and Exchange Board of India's regulatory sandbox framework. The bonds carried a 7.30% coupon and one-year-nine-month tenor, attracting ₹796 crore in bids — nearly eight times the amount accepted. Crypto Briefing reported that settlement, allotment, and listing on the NSE and BSE were completed on the same day using the Reserve Bank of India's wholesale digital currency, with participation from major institutional investors including HDFC Bank and ICICI Bank.
The pilot uses a permissioned distributed ledger under the Demat 2.0 framework, where ownership is recorded digitally and delivery-versus-payment happens simultaneously. Whales Book noted this approach aims to test whether tokenization can reduce settlement risks, lower operational friction, and improve liquidity and transparency in India's corporate bond market.
A Closely Controlled Pilot With Institutional Investors Only
The pilot was restricted to qualified institutional investors who needed access to both Demat 2.0 securities accounts and RBI wholesale central-bank-digital-currency wallets. About 20 investors participated, including Axis Bank, Yes Bank, AK Capital Services, ICICI Securities Primary Dealership, Taurus Group, and Trust Investment Advisors. News Riveting reported this restriction was designed to contain risk while giving regulators data before any broader rollout.
Tokenization Works Within Existing Regulatory Guardrails
The transaction does not involve publicly traded crypto assets. Instead, the ledger is permissioned and operates under full regulatory oversight of SEBI and the RBI. Whispers in the Corridors explained that REC, a central public sector enterprise under the Ministry of Power and a leading non-banking finance company, issued these bonds as a pilot test of new settlement technology — not as a venture into unregulated cryptocurrency.
Speed and Efficiency Gains Draw Investor Interest
Taurus Group founder Amar Gandhi said linking tokenized securities with central-bank-digital-currency payments could make allotment and settlement "significantly faster." The same-day settlement, allotment, and listing demonstrated this potential. Crypto Briefing noted the high oversubscription rate — nearly eight times demand — signals strong investor appetite for faster, cleaner bond transactions.
The pilot involved collaboration across India's financial infrastructure, including SEBI, the RBI, NPCI, depositories, and stock exchanges. Whales Book reported that Larsen & Toubro is separately seeking bids for three-year tokenized notes worth as much as ₹500 crore, suggesting follow-on issuance could accelerate if this pilot succeeds.
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