India plans to launch its first tokenized corporate bonds in a September pilot, with state-controlled REC Limited issuing the debt and select investors paying through a wholesale central bank digital currency. The Reserve Bank of India and market regulator SEBI are working together on the initiative.
India plans to test tokenized corporate bonds for the first time in a September pilot, Reuters reported Monday, citing three sources with direct knowledge of the plans. The transactions will settle using a CBDC, a central bank digital currency, rather than conventional payment rails.
REC Limited to issue the debt
State-controlled power infrastructure financier REC Limited plans to issue less than 5 billion Indian rupees ($57 million) in tokenized bonds. The pilot will open only to a select group of investors and could be unveiled at an annual financial technology event in Mumbai in September.
According to Reuters: "India's central bank digital currency will be used to buy the tokenized bonds." Investors will need two digital accounts to take part: a wholesale CBDC wallet provided by a bank and a new electronic securities wallet.
RBI and SEBI work together on the pilot
Indian securities depositories are developing that new wallet, called DEMAT 2.0, which will record bond holdings using blockchain-based distributed ledger technology. The Reserve Bank of India and the Securities and Exchange Board of India are working together on the initiative, Reuters reported.
The bonds will carry an initial three-month lockup period, and exchanges are expected to develop a secondary market for the tokenized bonds by December.
Cointelegraph contacted the RBI, SEBI and REC for comment on the reported plans but had not received responses at the time of publication.
Source: Cointelegraph
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