India's Tokenized Bond Pilot Raises Over $100 Million

India has launched its tokenized bond pilot, allowing corporate bonds to be issued and held as digital tokens on a distributed ledger. The pilot, led by the Securities and Exchange Board of India (SEBI) and the Reserve Bank of India (RBI), involves three companies issuing a combined $107 million in tokenized corporate bonds.

The first issuance came from REC, which raised 5 billion rupees from 18 investors on Monday. Engineering conglomerate Larsen & Toubro (L&T) and non-bank lender IIFL also issued bonds through the new market infrastructure.

The pilot aims to simplify the process of issuing and holding corporate bonds by reducing the time it takes for issuers to receive funds from two to three days to just one day. The system uses smart contracts to automate interest and redemption payments, eliminating the need for manual intervention.

SEBI said that India is the first country to combine bonds issued natively on a distributed ledger with settlement in central bank digital currencies (CBDCs) within existing regulated market infrastructure.