India will launch tokenised corporate bonds next month, as it tests the use of blockchain technology to enable instant settlement of bond transactions, three sources with direct knowledge of the matter said on Monday.The notes, to be issued for the first time by state-owned power financier REC, would place India alongside markets such as Europe and Hong Kong in using ‌the technology for ⁠issuance ⁠and settlement.Tokenised bonds are securities whose ownership, issuance, trading and settlement are recorded digitally on a blockchain or ​distributed ledger, allowing transactions to be completed almost instantly.India 10-year bond yield clings to 6.85%; traders eye oil moves amid sanctions threatIndian government bonds remained steady as traders awaited oil price movements. US sanctions on Iran could impact global crude prices significantly. Higher oil prices may fuel inflation and widen India's current account deficit. Reserve Bank of India policymakers are open to raising interest rates. Swap rates saw little activity after a substantial spike last week.India's markets regulator and central bank are working ​together on pushing the technology, according to the sources, who spoke on the condition of anonymity as the discussions are ongoing and confidential.REC will issue tokenised bonds worth less than ​5 billion rupees ($57 million) in the offering, the sources ⁠said.The offering ‌is expected to be unveiled at an annual financial technology event ​in Mumbai next ​month, one of the sources said.India's central bank digital currency will ⁠be used to buy the tokenised bonds, one of the ​sources said.Details about the issuer, timeline and framework have not ​been reported previously."The offering would be made available to only a select group of investors at the pilot stage," one of the sources said.Reuters could not ascertain the names of the investors.The central bank, markets regulator and REC did not respond to emails seeking comment.NEW BOND FRAMEWORKTo tap the bonds, investors will need to access two digital ‌accounts: a wholesale digital currency wallet provided by a bank, and a new electronic securities wallet, the sources said.Indian depositories are developing an ​e-wallet, a first ​of its kind, called ⁠DEMAT 2.0, which will record bond holdings on a distributed ledger technology chain."Subsequent trades can take place only between participants that hold both compatible CBDC and securities wallets," one ​of the sources said.The bonds will have an initial three-month lock-in and exchanges are expected to develop a secondary market for the tokenised bonds by December, one of the sources said.The securities will not be traded on the conventional electronic book provider platform, the sources said.Depositories NSDL and CDSL did not immediately respond to Reuters queries.