HDFC Bank and ICICI Bank buy India’s first tokenized bond from REC

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. The bond raised ₹500 crore (approximately $59 million) at a coupon rate of 7.30%, with a tenor of about one year and nine months. Demand wasn’t exactly tepid: bids totaled around ₹796 crore, making the issuance nearly eight times oversubscribed against its base issue size. 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 an...