Tokenised Securities: India Ready, Korea Prepares

India is preparing to take a significant step towards tokenised financial markets, with the country's first tokenised corporate bond pilot expected to be launched in September. At almost the same time, South Korea has unveiled a detailed roadmap to bring tokenised securities into its mainstream capital-market infrastructure from February 2027. Together, the developments underline how major Asian economies are moving beyond experiments with blockchain towards regulated, institution-led digital securities.

In India, state-owned power financier REC is expected to issue tokenised corporate bonds worth less than Rs 500 crore as part of a pilot being developed with the Reserve Bank of India (RBI) and the Securities and Exchange Board of India (SEBI). The pilot is designed to test whether distributed-ledger technology can make bond issuance and settlement faster and more efficient. Reports indicate that the settlement leg will use the RBI's wholesale central bank digital currency, or digital rupee.

A key piece of the Indian experiment is the proposed 'Demat 2.0' infrastructure being developed by the country's depositories. Unlike conventional dematerialised securities, tokenised assets can represent ownership and transaction records on distributed-ledger infrastructure, potentially allowing transactions to be settled with far less delay. The pilot is expected to be restricted initially to a selected group of investors, with a secondary market potentially emerging later.

The significance of the move is larger than a single bond issue. Tokenisation can allow financial assets to be represented digitally while embedding ownership, settlement and compliance processes into a technology-driven framework. In theory, this could reduce reconciliation requirements, lower settlement risk and eventually make certain financial instruments easier to transfer or access. The technology, however, does not eliminate the need for regulation, investor protection, cybersecurity and robust market infrastructure.

South Korea is taking a broader and more structured route. Its Financial Services Commission announced on September 4 a three-phase roadmap covering tokenised securities issuance and circulation. The first phase is scheduled to begin in February 2027, after amendments to the Electronic Registration Act take effect on February 4. Initially, the framework will cover privately pooled money-market funds and institution-only bonds, unlisted stocks through a trust structure, and publicly offered fractional-investment securities.

The second phase is intended to expand tokenisation to all publicly offered securities, while the final phase envisages an on-chain payments infrastructure linked to stablecoins. The Korean authorities have also said that the later phases will remain flexible, depending on the outcome of the first phase, technological developments and pending legislation around stablecoins.

The contrast between the two approaches is notable. India is beginning with a tightly controlled bond-market pilot that combines tokenised securities with central-bank digital currency settlement. South Korea is laying out a longer-term regulatory and infrastructure roadmap that could eventually extend across stocks, bonds and funds. Both approaches, however, reflect the same underlying shift: tokenisation is increasingly being treated not as a niche crypto experiment, but as a potential component of regulated financial-market infrastructure.

For investors and financial institutions, the immediate question will be whether these pilots can demonstrate tangible gains in settlement speed, transparency and operational efficiency without compromising market integrity. If they do, tokenised securities could gradually move from controlled pilots to a much wider role in Asian capital markets.