REC prices first tokenised Indian corporate bond at 7.30%
State-run REC has closed India's first tokenised corporate bond issue, securing INR 5 billion in bids at a 7.30% annual coupon. The transaction utilizes the Reserve Bank of India's digital currency for immediate settlement via blockchain.
State-run REC has completed India’s first tokenised corporate bond issue, accepting bids worth INR 5 billion. The bonds carry an annual coupon of 7.30% and mature in one year and eight months. This marks the first corporate debt transaction in the country to use blockchain technology for settlement.
The issue closed on Monday with settlement scheduled before the end of the day. The transaction uses the Reserve Bank of India’s central bank digital currency, or CBDC, for purchase and final payment. This infrastructure enables instant settlement through distributed ledger technology.
Blockchain infrastructure enables instant settlement
Tokenised bonds maintain ownership and trading records on a distributed ledger. This digital recording replaces traditional paper-based processes for issuance and settlement. The system allows for faster processing and better traceability of debt instruments.
Participation was restricted to investors holding active securities and CBDC wallets. This limitation reflects the pilot nature of the transaction rather than a retail launch. The restricted access ensures that only qualified institutional investors can access the digital assets.
India now joins markets in Europe and Hong Kong that have tested tokenisation for bond issuance. The move aligns with global trends in digital asset management. It positions the Indian debt market for potential future adoption of similar technologies.
Regulators test digital securities infrastructure
The Securities and Exchange Board of India and the RBI prepared for this pilot. Regulators aimed to assess if distributed ledger technology supports faster settlement. They also sought to verify automated servicing and greater transparency in corporate bonds.
Depositories are working on a system referred to as DEMAT 2.0 for tokenised securities. This infrastructure will record digital assets alongside existing debt-market systems. The successful REC transaction provides practical experience on issuance and settlement mechanics.
Market context for digital debt
The pilot is part of a broader effort to test digital securities. It follows earlier reports of limited investor groups and new digital infrastructure. The transaction validates the use of the wholesale digital rupee in debt markets.
GN auto markets/bonds: corporate bonds noted that this move signals a shift in Indian debt issuance. The integration of CBDC and blockchain offers a new pathway for capital raising. Future issues may expand access beyond the initial pilot group.
