India to Pilot Blockchain-Based Tokenised Bonds in September

India is reportedly launching its first tokenised corporate bond pilot in September 2026, led by state-owned REC Limited, issuing less than ₹500 crore (~$57 million). The pilot will use blockchain-based infrastructure and RBI’s wholesale digital rupee (CBDC) for near‑instant settlement, marking a major step in modernising India’s debt markets.

India’s pilot of tokenised corporate bonds is globally relevant because it signals how emerging markets are adopting blockchain settlement and central bank digital currencies (CBDCs) to modernize capital markets. This isn’t just a local experiment—it ties into broader trends reshaping global finance.

India’s use of RBI’s wholesale digital rupee aligns with experiments in Europe, China, and Hong Kong, showing CBDCs can power real-time settlement in debt markets.

Key Details of the Pilot

• Issuer: REC Limited (state-owned power financier)
• Size: Less than ₹500 crore (~$57 million)
• Launch Date: September 2026, unveiled at a financial technology event in Mumbai
• Technology: Distributed ledger (blockchain) for issuance, ownership, trading, and settlement
• Settlement Currency: RBI’s wholesale CBDC (e₹-W)
• Investor Access: Limited to a select group of institutional investors
• Wallets Required: Wholesale CBDC wallet and DEMAT 2.0 securities wallet

How Tokenised Bonds Work

• Digital Recording: Ownership, issuance, and settlement are logged on blockchain
• Instant Settlement: Eliminates multi-day reconciliation
• Transparency: Distributed ledger ensures traceability
• Automation Potential: Coupon payments and servicing can be automated
• Difference from Crypto: Tokenised bonds remain regulated securities

Comparison: Conventional vs Tokenised Bonds

Aspect	Conventional Bonds	Tokenised Bonds (Pilot)
Settlement Time	Multi-day	Near-instant via blockchain
Ownership Record	Depositories (NSDL/CDSL)	DEMAT 2.0 ledger
Currency Used	INR (bank settlement)	RBI wholesale CBDC (e₹-W)
Investor Access	Broad (institutions + retail)	Restricted pilot investors
Transparency	Fragmented	Full ledger traceability

Risks & Challenges

• Scalability: Blockchain adoption may face performance bottlenecks
• Cybersecurity: Distributed ledgers must be safeguarded against attacks
• Regulatory Uncertainty: SEBI and RBI still refining frameworks
• Limited Access: Retail investors excluded until infrastructure matures
• Liquidity: Pilot capped at ₹500 crore, limiting secondary market depth

Global Context

India joins Europe and Hong Kong, which have already tested blockchain-based bonds. This positions India as a regional leader in debt market innovation, with potential to expand retail access once DEMAT 2.0 and CBDC infrastructure scale up. 

• Europe & Hong Kong: Already tested blockchain-based bonds
• India’s Position: Emerging as a regional leader in debt market innovation
• Future Potential: Retail access possible once DEMAT 2.0 and CBDC scale up