RBI Flags Risks: Stablecoins Remain Outside India’s Financial Framework

Stablecoins, pegged to fiat currencies, are often marketed as “stable” alternatives to volatile cryptocurrencies. However, RBI officials highlight that they lack the essential attributes of money—fiat trust and singleness—and could enable currency substitution, illicit flows, and capital flight. India’s UPI, RTGS, and CBDC pilots are seen as safer, scalable solutions for both domestic and cross-border payments.  

Notable updates  
• RBI warns stablecoins undermine monetary sovereignty and financial stability  
• Deputy Governor rules out a role for stablecoins in India’s financial system  
• Risks flagged: currency substitution, capital measure circumvention, systemic vulnerabilities  
• India’s CBDC pilots already cover retail and wholesale use cases, reaching millions of users  
• RBI emphasizes strengthening UPI, RTGS, and CBDC corridors over private crypto tokens  

Major takeaway  
RBI’s stance underscores a clear policy direction: India will prioritize its own payment stack and CBDC innovation while keeping stablecoins at arm’s length to safeguard macroeconomic stability.  

Sources: Mint, Business Standard, The Hindu BusinessLine, ANI, Republic World