India Launches Digital Rupee Settlement for Bonds
India's Reserve Bank of India (RBI) has launched a digital rupee settlement system for bonds, marking a significant step in the country's adoption of blockchain technology. The RBI has issued approximately $116 million in tokenized corporate bonds through three transactions settled with its wholesale digital rupee.
The pilot project, called Demat 2.0, connects a distributed ledger owned by India's statutory depositories with the RBI's Unified Market Interface. This atomic settlement system moves the bond and its payment together as one transaction, eliminating the risk of one part of a transaction completing while the other fails.
REC Limited was the first issuer to complete a transaction on September 7, raising ₹500 crore from 18 investors. Larsen & Toubro followed with a ₹500 crore bond purchased by four investors, and IIFL issued ₹25 crore to one investor on the same day. The system allows issuers to receive payment on the bidding day, reducing the previous settlement period of two to three days.