India to Pilot Tokenized Bonds with Blockchain Settlement via CBDC

India is set to test its first tokenized corporate bond issuance in September using blockchain settlement tied to the country's central bank digital currency (CBDC).

The pilot will be conducted through a limited group of investors, with REC Limited planning to issue less than 5 billion Indian rupees ($57 million) in tokenized bonds.

Participating investors will require two separate digital accounts: a wholesale CBDC wallet and a dedicated electronic securities wallet.

The initiative is expected to reduce settlement friction by bringing securities settlement and payment settlement into a unified flow, as the country's central bank and securities regulator work with depositories on the project.