India Set to Pilot Tokenised Corporate Bonds in September

As E-Sutra gears up to host the first India Bond Tokenization Summit 2026 (IBTS 2026) on 9th September in Mumbai, we could not have hoped for a better start. India has taken the first steps towards launching a tokenised bond.

According to a Reuters report, India is ready to take a significant step towards blockchain-enabled capital markets, with the launch of its first tokenised corporate bond issuance in September.

State-owned power financier Rural Electrification Corporation (REC) is expected to issue tokenised bonds worth less than ₹5 billion (around $57 million) as part of a pilot aimed at testing distributed ledger technology (DLT) for bond issuance and settlement. The initiative would place India alongside financial markets such as Europe and Hong Kong that are experimenting with blockchain-based securities infrastructure.

According to Reuters, the pilot is being developed with the involvement of the Reserve Bank of India (RBI) and the Securities and Exchange Board of India (SEBI). The offering is expected to be introduced in Mumbai next month and will initially be restricted to a select group of investors.

Tokenised bonds represent conventional securities through digital records maintained on a blockchain or distributed ledger. The technology can potentially allow issuance, ownership transfers and settlement to take place through a shared digital infrastructure, reducing the time and operational friction associated with conventional securities settlement.

India's proposed pilot goes beyond simply putting bonds on a blockchain. Reuters reports that investors will need access to two digital wallets: a wholesale Central Bank Digital Currency (CBDC) wallet provided by a bank and a new electronic securities wallet being developed by India's depositories.

The securities wallet, described by sources as "DEMAT 2.0," is expected to record bond holdings using distributed ledger technology. Subsequent transactions would be restricted to participants holding compatible CBDC and securities wallets.

The use of India's CBDC as the settlement asset could make the pilot particularly significant. It would allow the country to test not only tokenised securities, but also the interaction between programmable digital settlement infrastructure and regulated capital markets.

The tokenised bonds are expected to carry an initial three-month lock-in. According to Reuters, stock exchanges could develop a secondary market for these instruments by December, although the securities would not initially trade through conventional electronic book-provider platforms.

The immediate objective is therefore likely to be controlled experimentation rather than a wholesale replacement of India's existing bond-market infrastructure.

For India's broader tokenisation agenda, however, the pilot could prove important. E-Sutra has previously highlighted the need for regulatory clarity, institutional participation and practical sandbox-based experimentation as tokenised assets move from concept to financial-market applications. India's evolving securities framework is increasingly taking a technology-neutral approach, with tokenised representations of conventional securities remaining subject to securities regulation based on their economic substance.

The REC pilot could provide an important real-world test of that approach — bringing together regulated issuance, digital settlement, custody and secondary-market infrastructure within a controlled environment.

If successful, such experiments could help establish the operational and regulatory foundations required for wider adoption of tokenised securities in India.

The details of the proposed offering, including the participating investors and final framework, have not yet been publicly confirmed. Reuters reported that the RBI, SEBI and REC did not respond to requests for comment.