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India to pilot tokenized corporate bonds settled via wholesale CBDC
The Reserve Bank of India and markets regulator SEBI are working with REC Limited on a pilot that would issue under 5 billion rupees, with a planned three-month lockup and a potential secondary market by December.
India is planning its first tokenized corporate bond pilot, using blockchain transactions settled through a wholesale central bank digital currency, according to Cointelegraph citing Reuters.
REC Limited, a state-controlled power infrastructure finance firm, would issue less than 5 billion Indian rupees, or about $57 million, in tokenized bonds. The pilot is expected to begin in September, potentially tied to an annual financial technology event in Mumbai, and would initially be limited to a select group of investors.
The central bank digital currency would be used for investors to buy the bonds, Reuters reported. Participants would need a wholesale CBDC wallet from a bank and a new electronic securities wallet, DEMAT 2.0, under development by Indian securities depositories to record bond holdings using distributed ledger technology.
Cointelegraph also reports that the bonds would carry an initial three-month lockup period, and exchanges are expected to develop a secondary market for the tokenized bonds by December. The RBI, SEBI, and REC were contacted for comment but had not responded at the time of publication.