India plans to issue its first tokenized corporate bonds in September as part of a pilot project settled using a blockchain-based central bank digital currency (CBDC).
State-controlled Indian power sector infrastructure finance company REC Limited is planning to issue tokenized bonds worth less than 5 billion Indian rupees ($57 million), Reuters reported on Monday, citing three sources familiar with the plans. Initially, only a limited group of investors will be allowed in the pilot. It may be presented at an annual fintech event in Mumbai in September.
"The digital currency of the Indian central bank will be used to purchase the tokenized bonds," Reuters reported, citing one source. To participate, investors will require two digital accounts: a CBDC wholesale wallet provided by a bank and a new electronic securities wallet.
Indian securities depositories are developing a new DEMAT 2.0 wallet. Information about bond ownership will be stored using distributed ledger technology. According to Reuters, the country's central bank, the Reserve Bank of India (RBI), and the securities market regulator, the Securities and Exchange Board of India (SEBI), are working together on the initiative.
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 by the time of publication.
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