India’s capital markets are taking a tangible step toward blockchain-based settlement. The country’s securities regulator and central bank have launched a pilot that enables corporate bonds to be issued and held as tokenized assets, with settlement linked to the Reserve Bank of India’s (RBI) wholesale central bank digital currency (CBDC).

On Thursday, the Securities and Exchange Board of India (SEBI) said its “Demat 2.0” initiative allows corporate bonds to be issued and recorded as digital tokens on a distributed ledger maintained by India’s statutory depositories. The system is designed to connect to the RBI wholesale CBDC using the central bank’s Unified Market Interface (UMI).

Key takeaways

• SEBI’s Demat 2.0 pilot tokenizes corporate bond issuance and ownership records within India’s regulated depository framework.
• Settlement is tied to the RBI wholesale CBDC via the UMI, with SEBI describing “atomic settlement” to reduce timing mismatches between cash and bonds.
• The first issuers—REC, Larsen & Toubro (L&T), and IIFL—collectively raised 10.25 billion rupees (about $107 million) across multiple transactions.
• SEBI says issuers can receive funds on the day of bidding rather than the typical two- to three-day delay.
• Investors can use existing Demat accounts, but must enable Demat 2.0 through their depository and have a wholesale CBDC wallet with a participating bank for settlement.

The Demat 2.0 pilot and the first set of tokenized bond issuances

SEBI said Demat 2.0 enables tokenized corporate bonds to be issued and held on a distributed ledger managed by statutory depositories. The pilot architecture is intended to keep corporate bond legal issuance and investor protections within the existing framework, while modernizing the recording and settlement layer.

Three companies participated in the initial launch. SEBI reported that public-sector lender REC raised 5 billion rupees from 18 investors on Monday. Engineering and construction conglomerate Larsen & Toubro (L&T) followed with a separate 5 billion rupees issuance from four investors on Wednesday. Non-bank lender IIFL also issued 250 million rupees to a single investor on the same day.

In practical terms, SEBI said the infrastructure is designed to accelerate the payment window. Instead of funds arriving two to three days after bidding, the regulator claims issuers receive funds on the day of bidding. SEBI linked this improvement to “atomic settlement,” describing it as a mechanism that removes delay between transfers of money and transfers of bonds.

The regulator also pointed to smart contracts as a way to automate key cash-flow events associated with the bonds, including interest and redemption payments. While the details of the smart-contract logic were not elaborated in the announcement, SEBI’s emphasis is clear: the pilot aims to streamline both settlement timing and payment operations.

From a smaller REC test to a broader first phase

The pilot expands beyond what was initially described in earlier reporting. In August, Reuters said India planned to test tokenized corporate bonds through an REC issuance of less than 5 billion rupees with selected investors. The subsequent SEBI update indicates the launch went further than that preliminary plan.

SEBI’s description of the first phase shows that the pilot moved past the original REC-only concept to include two additional issuers. With REC at 5 billion rupees and the combined additions of L&T and IIFL, the first-phase total rose to more than double the originally reported amount expectation for REC.

SEBI also said the issuances in the first phase remain ongoing. It described later phases as building out functionality, including secondary trading using existing request-for-quote platforms and opening access to retail investors. The regulator added that experience from the pilot would inform any wider rollout.

How investors access tokenized bonds without changing Demat structure

A key question for tokenized-market pilots is whether investors must rebuild their infrastructure. SEBI said tokenized bonds can be held in existing Demat accounts without opening a separate account or completing new KYC processes.

However, SEBI noted that participation still requires enablement of Demat 2.0 through an investor’s depository. On the settlement side, investors must also maintain a wholesale CBDC wallet with a participating bank to receive and settle payments under the pilot’s CBDC-connected workflow.

SEBI further characterized the approach as a combination of three elements: (1) bonds issued “natively on a distributed ledger,” (2) ownership records maintained by statutory depositories, and (3) settlement conducted in CBDCs within existing regulated market infrastructure. The regulator’s framing suggests the pilot is meant to reduce friction between new settlement mechanics and the established compliance and custody system investors already rely on.

What remains unchanged: legal status and investor protections

Tokenization can raise concerns about legal enforceability and consumer safeguards, especially when settlement technology shifts from traditional rails to blockchain-linked workflows. SEBI addressed this directly by stating that tokenization does not alter the legal status of the bonds, repayment obligations, or investor protections.

That clarification matters for market participants evaluating risk: it implies the pilot is focused on changing how bonds are issued, recorded, and settled—rather than redefining the underlying contract or regulatory rights attached to the instruments. For issuers, the pitch is largely operational (faster funding and potential payment automation). For investors, the emphasis is on continuity of rights even as settlement infrastructure evolves.

As the first phase continues, the market will be watching whether SEBI’s promised advantages—same-day funding, atomic settlement behavior, and smooth automation of interest and redemption—hold up in practice. The next milestone will likely be how Demat 2.0 is extended toward secondary trading and broader investor access, and whether the pilot’s approach can scale without creating new operational bottlenecks.

A ripple effect

Bitcoin’s “dip-buying” impulse appears to have been unusually subdued around early July, according to onchain analysis that tracks how quickly dormant BTC returns to active hands after sharp price declines. While BTC briefly traded below the $58,000 level on July 1, the portion of coins that had been inactive for just one to seven days—an indicator of fresh participation—rose only marginally in the days that followed.

The muted response is the latest datapoint in a wider debate about whether Bitcoin’s bear-market bottom has already formed. Prominent analyst Willy Woo suggested the behavior could reflect slow, steady accumulation rather than the usual crowd-like rush to buy new lows, while other market participants continue to argue that bearish market structure may still be in place.

Key takeaways

• Look Into Bitcoin’s HODL Waves data shows limited movement from “one-to-seven-day dormant” BTC holders around July 1, with the share rising only slightly after the dip.
• Willy Woo characterized the pattern as an “anomaly,” proposing that if buying happened at the lows, it may have been concentrated among only a few participants.
• The findings add uncertainty to claims that July represented a clear structural bear-market turn, as buyers did not show a strong onchain reaction to the macro low.
• Other analysts continue to point to bearish chart structure—such as lower-high behavior—and warn that further confirmation may be needed.

HODL Waves: early July lows didn’t trigger a buying spike

The analysis centers on Bitcoin’s HODL Waves metric, which groups BTC by how long coins have remained dormant in wallets. By plotting these groups over time, the chart can reveal how investors tend to behave after notable price events—particularly whether new lows draw quick, widespread buying.

On July 1, BTC/USD dipped below $58,000, reaching levels last seen in September 2024, per analysis referenced by Cointelegraph’s market coverage. Look Into Bitcoin data cited in the report shows that on that day, coins dormant for between one and seven days accounted for 1.97% of supply.

Instead of jumping materially as price stabilized, the share increased only modestly—reaching 2.35% by July 5. In practical terms, this suggests that the demand response at the lows was not dramatic enough to create a noticeable spike in short-dormant coin activity during that window.

Willy Woo: “slow” accumulation suggests few buyers

For onchain analyst Willy Woo, the lack of a strong reaction stands out because earlier BTC sell-offs often prompted a faster buy-back from participants seeking to capitalize on new lows. He argued that July looked different from typical patterns of “knee-jerk” dip buying.

In a post on X referenced by the report, Woo wrote that “whoever bought the bottom did it slowly,” adding that it could have been “possibly even a single whale.” He framed the behavior as an “anomaly” relative to how buyers previously responded to long-term price weakness.

Woo also cautioned that the interpretation may not be perfect. He noted that institutional investment vehicles could influence what the HODL Waves metric shows, meaning the onchain pattern might not map cleanly to every actor’s behavior. Still, he suggested there was no obvious alternative explanation for the unusual steadiness other than accumulation spreading across investors in a way that did not produce the sharp, herd-like spikes typically associated with many buyers acting at once.

Does July mark a bear-market bottom? The debate persists

Whether July truly marked Bitcoin’s latest bear-market bottom remains contested. The muted onchain response does not automatically rule out a long-term cycle shift, but it does complicate narratives that rely on strong, immediate buyer behavior at macro lows.

Cointelegraph previously reported that opinions diverged sharply after BTC rebounded above $80,000, with analysts pointing to the idea that future macro lows may still be required to complete the next phase of the historical pattern. In that framing, chart behavior and onchain participation both matter, and a subdued buyer reaction can be seen as a reason to remain cautious.

Trader and analyst Rekt Capital, for instance, has continued to argue that Bitcoin’s bearish structure may still be intact even after rebounds. In an earlier warning cited in the report, he highlighted the likelihood of a “repeat of bearish price history” unless price flips course in time for a relevant weekly close. Rekt Capital specifically referenced a potential breakdown risk if the weekly close fell below approximately $78,300.

Put differently, the onchain data in early July adds weight to the view that any “bottom” signal may need further confirmation from both price action and investor participation, rather than being inferred from a single low point.

What changed into August: buyer appetite appears to return

While the early July episode looked muted in the HODL Waves window, the broader backdrop later shifted. The report points to increased buyer appetite in August, citing data from Cointelegraph coverage that US spot Bitcoin exchange-traded funds (ETFs) recorded $3.8 billion in net inflows over a three-week stretch.

This contrast matters because it highlights a potential asymmetry: early July may have reflected limited onchain “short-dormant revival,” whereas later institutional inflows suggest demand returned via channels that can influence market dynamics over time. However, the two datasets don’t necessarily mean the same thing—HODL Waves measures dormancy patterns in wallet holdings, while ETF flows reflect purchasing and selling through regulated investment products.

For traders and long-term holders, the practical takeaway is that the market’s “buying response” can appear in different places at different times. July’s lull does not eliminate the possibility of a bottom, but it does raise the bar for what kind of follow-through investors should look for next—whether that follow-through comes through renewed onchain movement, sustained ETF inflows, or a clearer technical transition.

Going forward, readers should watch whether Bitcoin’s price action can sustain improvements without reverting to the lower-high behavior some analysts expect, while also tracking whether onchain dormancy patterns begin to show more decisive participation when price tests stress levels again.