India Settles First Tokenised Corporate Bond

REC Limited issued India’s first tokenised corporate bond for 500 crore in September 2026. The deal included a 100 crore base issue and a 400 crore green-shoe option. The bond carries a 7.30% coupon and a tenor of one year and nine months. Bids reached 796 crore, which is nearly eight times the base amount. The instrument now trades on the NSE and BSE. Buying, allotment, and listing all happened on the same day.

This issue follows the Reserve Bank of India’s launch of the wholesale digital rupee in November 2022. That move allowed digital settlement of government securities. The new bond issue extends this technology to the corporate market. It represents the next step after electronic demat accounts became standard in the 1990s.

Same asset, different plumbing

The bond remains legally identical to a standard corporate bond. It retains the same ISIN, issuer, and credit rating. Investor rights and cash flows do not change. The difference lies in the settlement infrastructure. Ownership records sit on a permissioned ledger. The securities wallet links directly to the existing demat account. Investors do not need new accounts or additional KYC checks.

Payment occurs through the RBI’s wholesale digital rupee. The bond and cash are linked in a single transaction. This process is known as atomic delivery-versus-payment. It eliminates the risk that one party delivers the bond but is not paid. Coupon payments are automated through software embedded in the token. This reduces the need for manual reconciliation.

Regulatory path to pilot

SEBI established a regulatory sandbox in June 2020. This framework allows firms to test new financial technologies. Global markets in Switzerland, Hong Kong, and Germany ran similar experiments between 2023 and 2025. SEBI announced plans for a tokenisation pilot in May 2026. REC Limited volunteered as the pilot issuer. The state-owned financier executed the issue by September 2026.

Market efficiency gains

The primary benefit is speed. Traditional bond settlement often takes two days. This pilot achieved same-day completion. The use of digital rupees removes reliance on traditional banking rails for this specific flow. The system maintains the familiar bond architecture. It upgrades the backend technology without changing the legal structure. GN auto markets/bonds: corporate bonds notes that this aligns with global trends toward programmable finance.