India Is Finally Getting Its First Tokenized Corporate Bond

India Is Finally Getting Its First Tokenized Corporate Bond

Srividya Kalyanaraman

Mon, August 24, 2026 at 9:02 PM GMT+3 2 min read

THE GIST

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India's set to launch its first tokenized corporate bond in September. The issuer is state-owned power financier REC, issuing bonds worth $57 million. The bond market in India has for long struggled with liquidity and manual processing, so it was time blockchain took over.

And India is trailing behind markets such as Europe and Hong Kong in using distributed ledger technology for bond issuance and settlement. So it was time the market regulator, SEBI, stepped up.

WHAT HAPPENED

REC Limited, formerly Rural Electrification Corporation Limited, is a public sector company that finances and promotes power projects across India. With this issuance, REC aims to raise $57 million in corporate bonds. Market regulator SEBI and the central bank are working together on the technology where India's central bank digital currency will be used to purchase the bonds.

This will be run as a pilot project first with a select group of investors. And to participate, investors will need two digital accounts: a wholesale digital-currency wallet issued by a bank, and a new electronic securities wallet. But the latter part is still in progress.

WHY IT MATTERS

The pilot might be small by design but the problem it's trying to solve is big and structural.

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India's corporate bond market stands at roughly $617 billion, or about 16% of GDP. But thanks to limited liquidity in the secondary market, there's been a heavy dependence on private placements. Tokenization is pitched as a partial fix: settlement that happens near-instantly on a shared ledger, rather than through the multi-day, multi-intermediary process typical of traditional bond trades.

At $57 million, the size of this issuance has already been tested before. Siemens issued €360 million in digital bonds, and South Korea's POSCO International issued a $100 million digital bond in Hong Kong so India's $57 million pilot sits in line with, rather than ahead of, the size of deals other markets have tested first.

WHAT'S NEXT

The bond pilot lands alongside a separate but related push: market regulator SEBI has been steadily digitizing foreign portfolio investor onboarding.

This means foreign portfolio investors (FPIs) can hand over control to their custodians, which eliminates the need for unnecessary paperwork like notarization of documents. It also cuts onboarding time, a change that took effect August 20.

Faster, cheaper foreign-investor access to a tokenized bond market means more efficient cross-border investments.