India just entered the tokenized bond market. REC Ltd., the state-owned power sector financier, issued the country’s first tokenized corporate bond, with HDFC Bank and ICICI Bank among the roughly 20 institutional investors who snapped up the offering.
How the tokenized bond actually works
In this case, ownership records for the bonds live on a distributed ledger rather than in legacy depository systems. Settlement happened atomically, meaning the exchange of securities and cash occurred simultaneously through the Reserve Bank of India’s wholesale Central Bank Digital Currency. The result: same-day pay-in and listing on both the National Stock Exchange and the Bombay Stock Exchange.
The technical infrastructure relies on what’s being called DEMAT 2.0 securities accounts, an upgrade from India’s existing dematerialized account system. To participate, institutional buyers needed access to both these new accounts and RBI wholesale CBDC wallets.
One important distinction worth noting. This is not a crypto product. No public blockchain tokens or crypto assets are involved in the transaction. The distributed ledger is permissioned and sits within the regulatory perimeter of SEBI and RBI.
