New Delhi, Sept. 16 -- Tokenized bond issuances by Rural Electrification Corp., Larsen & Toubro and IIFL Finance mark an important technological milestone for India's debt market, but market participants believe the transactions remain largely ceremonial until a functioning secondary market, interoperable infrastructure and financing mechanism are put in place.

Last week, REC raised Rs.500 crore through its first-ever tokenized corporate bonds maturing on 31 May, 2028 at a coupon of 7.30%. This was followed by L&T raising Rs.500 crore through a similar mechanism, with bonds maturing in three years at a coupon of 7.40% and IIFL Finance borrowing Rs.25 crore.

Tokenized bonds are essentially bonds whose ownership and transactions are recor...