India plans to issue its first tokenized corporate bonds in September as part of a pilot project settled with a blockchain-based central bank digital currency (CBDC).
The state-controlled Indian company REC Limited, which finances energy infrastructure, plans to issue tokenized bonds worth less than 5 billion Indian rupees ($57 million), Reuters reported on Monday, citing three sources familiar with the plans. At the initial stage, only a limited group of investors will be allowed to participate in the pilot. It may be presented at an annual fintech event in Mumbai in September.
"The tokenized bonds will be purchased using the Indian central bank's digital currency," Reuters reported, citing one of the sources. To participate, investors will need two digital accounts: a bank-provided wallet for wholesale CBDC and a new electronic securities wallet.
Indian securities depositories are developing a new DEMAT 2.0 wallet. Information on bond ownership in it will be stored using distributed ledger technology. According to Reuters, the initiative is a joint effort by the country's central bank, the Reserve Bank of India (RBI), and the market regulator, the Securities and Exchange Board of India (SEBI).
The initial lock-in period for the bonds will be three months. By December, exchanges are expected to create a secondary market for tokenized bonds.
Cointelegraph reached out to RBI, SEBI, and REC for comment on these plans but had not received a response at the time of publication.
Related: StanChart and HSBC conduct first real transaction on Swift's blockchain ledger
