Tokenization to unlock India's bond market to millions of retail investors

Organised in Mumbai on September 9, the Summit saw the country’s finance, policy and technology leaders come together to discuss the future of bond tokenization. 

The panel highlighted Prime Minister Narendra Modi's vision of seeing tokenization as India's next frontier of innovation. 

Speaking at the event, E-Sutra co-founder Kanhaiya Singh, said that India’s has immense financial potential. He added that the country has the capacity to tokenize a staggering $600 billion in real-world assets. 

This significant digital shift would unlock wave of new wealth-building opportunities for retail investors and major financial institutions, Singh said.

Singh also distinguished tokenized real-world assets from cryptocurrencies. He said, cryptocurrencies are purely native digital codes. These are backed by nothing physical and are mostly unregulated. 

However, tokenization represents legal ownership of a tangible asset—like a corporate bond or property—within a strict government framework.

Echoing similar sentiments REC Ltd Executive Director Mohan Lal Kumawat said unlike the traditional process tokenized bond transaction issuance and settlement takes much lesser time. 

Citing REC's tokenization pilot, he said a tokenized bond transaction was completed in around two hours.

REC raises around Rs 1 lakh crore annually through the bond market, according to the panel.

Earlier, during the summit, experts opined that in the digital asset sphere, the industry is introducing an entirely new method of asset ownership. 

For these digital bonds to scale, this new format must be deeply regularized and legislated. 

Global legal frameworks must explicitly define what a token represents, ensuring that digital ownership holds the exact same legal weight as traditional paper-and-registry documentation in a court of law.