Zee Business Bond Tokenisation Summit: 'Tokenisation could make bonds more accessible to retail investors', say experts
The panellists also clarified the difference between tokenised real-world assets and cryptocurrencies. Cryptocurrencies are digital assets themselves, whereas tokenisation involves creating digital representations of ownership or economic rights in real-world assets under a regulated system.
Experts said tokenisation could represent the next major step in the digitisation of India's financial markets. Representational Image
Experts believe blockchain-based tokenisation could make India's bond market more accessible to retail investors, with faster settlement times and the option to invest smaller amounts. The topic was discussed at a panel titled "Code to Capital: Tokenisation and the Bond Market" at the Zee Business Bond Tokenisation Summit 2026 in Mumbai on Wednesday.
WION anchor Kanishka Sarkar moderated the session, which featured REC Ltd Executive Director Mohan Lal Kumawat, E-Sutra co-founder Kanhaiya Singh and technology expert Tejinder (Vik). The speakers discussed how digital assets and emerging technologies could reshape India's fixed-income market.
Tokenisation could unlock a large asset base
According to Singh, tokenisation is not merely about adopting new technology but about making financial products accessible to more people. He said India could potentially tokenise assets worth around $600 billion, creating fresh opportunities for both investors and financial institutions.
The discussion also highlighted the distinction between tokenised real-world assets and cryptocurrencies. While cryptocurrencies operate as native digital assets, tokenisation involves representing ownership or economic interests in real-world assets through digital tokens within a regulated framework.
Singh added that tokenised instruments can offer investors defined ownership rights, identifiable underlying assets, and a structured yield mechanism, subject to applicable regulations.
The discussion also touched on Prime Minister Narendra Modi's view that tokenisation could be the next major innovation frontier for India, alongside emerging technologies such as agentic artificial intelligence and quantum computing.
REC pilot shows faster bond settlement
Kumawat highlighted REC's recent tokenisation pilot, which demonstrated how the technology could significantly cut the time taken to complete bond transactions. REC raises around Rs 1 lakh crore annually through the bond market. Compared with the traditional two-to-three-day process for issuing and settling bonds, the pilot completed a tokenised transaction in roughly two hours.
Over the 20-day pilot, 20 institutional investors were mapped, and 18 received their allotments almost instantly. The exercise also saw the digital wallet network expand, from just one bank at the start to five major banks by the time the pilot concluded.
Tokenisation could lower entry barriers for retail investors
One of the key issues discussed during the session was the limited participation of retail investors in corporate bonds.
Large bond issues from institutions such as REC generally attract major institutional investors because of their high face value and steep investment requirements. The panel noted that retail participation in such instruments remains limited.
By dividing bonds into smaller units, tokenisation could allow investors to buy fractional interests rather than committing to large denominations. Technology expert Tejinder (Vik) said the model could open up highly rated fixed-income investments to small savers, including homemakers and households looking to invest smaller sums.
He cited the example of investors who regularly save Rs 1,000 through kitty parties or other household savings, noting that such amounts could potentially be directed towards AAA-rated tokenised bonds offering yields of around 9 per cent, depending on market conditions and regulatory approval.
The panel compared the possible impact of tokenisation to the introduction of dematerialised securities. While investors were initially hesitant to shift from physical share certificates to demat accounts, digital trading has since become mainstream.
Experts said tokenisation could represent the next major step in the digitisation of India's financial markets.
Regulatory framework remains key
The panellists pointed out that India does not need to build its digital ecosystem from scratch for tokenisation. Existing systems such as e-KYC, DigiLocker, UPI and the RBI's wholesale CBDC infrastructure could provide the foundation for tokenised financial products.
However, experts noted that a clear regulatory framework will be critical for the wider adoption of tokenised bonds and other real-world assets.
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They compared the development of India's bond market to the growth of a bamboo plant, which spends years developing its root system before experiencing rapid growth above ground.
According to the panel, once the regulatory framework is fully established, the number of bond investors in India could rise significantly.
The experts estimated that the investor base could expand from around 5 crore currently to 15 20 crore, as smaller investors gain easier access to digital fixed-income products.
The broader message from the summit was that tokenisation could help bridge the gap between India's large pool of financial assets and millions of retail savers, provided technology, regulation, and investor protection develop together.
How can bond tokenisation reshape the market?
Tokenisation brings traditional bonds onto blockchain infrastructure by issuing digital tokens representing ownership or economic rights.
By storing records on a shared digital network, smart contracts automatically handle interest payouts, repayments, and regulatory rules. This eliminates usual middlemen, speeds up transactions, and makes the system much more transparent, while enabling investors to buy smaller fractional pieces of a bond instead of the whole lot.
Essentially, this makes the entire bond lifecycle smoother and more transparent for every stakeholder.
For Dalal Street, bond tokenisation is more than just a fintech trend: it can deepen liquidity in India's relatively thin corporate bond market, broaden investor access (including retail investors via smaller lot sizes), and integrate seamlessly with upcoming digital public infrastructure (like account aggregators and e-rupee pilots).
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