In what would be a first for the country — and will also put it at par with Europe & HongKong — India is planning issuing its first set of ‘tokenised’ bonds, this September. According to a report from Reuters, while the offering is relatively smaller in size, it will enable India to have a regulatory framework for issuing bonds via blockchain distribution.
The bond notes are to be issued by by state-owned power financier REC (Rural Electrification Corporation), and are expected to be announced at a major event in Mumbai, this September. The issue size is US$57Mn (~₹500 crore).
Tokenised bonds, which have already been issued in some markets such as the Europe and HongKong, are securities whose ownership, issuance, trading and settlement are recorded digitally on a blockchain or distributed ledger. This allows near instant settlement of all transactions, increasing transparency and attractiveness of the overall bond markets.
The bonds shall only be issued to a select group of investors, names of which are currently unknown. Both Indian markets regulator SEBI and the Reserve Bank are working together on pushing the technology for this issue, along with pushing it for newer issues as well.
India’s central bank digital currency will be used to buy the tokenised bonds, one of Reuters’ sources said.