India's financial regulators plan to launch their first tokenised corporate bond pilot in September 2026, with the Reserve Bank of India and Securities and Exchange Board of India leading the effort and state-owned Rural Electrification Corporation as the inaugural issuer, according to reporting on the initiative.
The pilot will issue bonds worth less than $57 million and settle them using India's wholesale central bank digital currency and DEMAT 2.0, the country's dematerialised securities settlement system. The structure pairs on-chain issuance with existing domestic settlement infrastructure rather than building a parallel blockchain rails.
Rural Electrification Corporation, a government enterprise that finances rural electrification projects, has a standalone investment-grade credit rating and annual funding needs exceeding $5 billion. REC was selected as first issuer. SEBI and RBI have been coordinating on tokenised securities since 2024, when the central bank began testing its digital rupee in wholesale transactions.
The pilot sits within a broader shift toward on-chain real-world assets in Indian policy. The RBI has permitted banks to settle forex trades on blockchain since late 2023 and has allowed select fintechs to issue tokenised deposits. SEBI separately approved the first regulated crypto exchange licenses in 2024, narrowing the legal gap between traditional and digital asset infrastructure.
Settlement via DEMAT 2.0 rather than a public blockchain limits custody and counterparty risk but also constrains the transparency benefits tokenisation typically offers. DEMAT 2.0 is a private, permissioned ledger operated by India's central depository. Wholesale CBDC transactions settle directly between the RBI and participating banks in real time, removing intermediary settlement risk that plagues traditional corporate bond trading.
The $57 million cap is standard for financial pilots globally. If successful, the regulators are expected to expand issuance limits and participant access in subsequent phases, though no timeline for those steps has been announced.
India's move follows similar pilots in Hong Kong, Singapore and the European Union, all testing tokenised bonds on permissioned ledgers with central bank settlement. India's use of its own wholesale CBDC distinguishes it from EU pilots that settled in euro stablecoins.
The September launch date gives SEBI and RBI roughly two months to finalise operational rules and REC to prepare bond terms. If the pilot executes on schedule, the first tokenised corporate bonds in India will settle within weeks of the announcement.
