Industry experts are increasingly advocating for India to adopt a "stablecoin-first" approach to its cryptocurrency policy. This perspective emphasizes the potential of stablecoins to revolutionize the Indian financial landscape, particularly in areas like remittances and digital payments, while also acknowledging the need for careful regulation to mitigate risks.
Stablecoins, cryptocurrencies designed to maintain a stable value by being pegged to a fiat currency or other reserve asset, have gained significant traction globally. Their market capitalization has surged, reaching over $250 billion in May 2025, demonstrating their growing role in the financial ecosystem. Experts believe stablecoins offer a unique blend of stability and efficiency, combining the stability of traditional currencies with the programmability of blockchain technology.
India, as the world's largest remittance market, stands to gain significantly from the adoption of stablecoins. In 2024, the country received over $129 billion in remittances, but the cost of transferring money from overseas remains high, ranging from 3% to 7%. Stablecoins could drastically reduce these costs, saving billions of dollars annually in fees and charges.
However, the path to stablecoin adoption in India is not without its challenges. The Reserve Bank of India (RBI) has expressed concerns about the potential risks stablecoins pose to monetary policy and financial stability. These concerns include the potential for undermining sovereign control over currency and the effectiveness of monetary policy.
Despite these concerns, experts argue that a well-regulated stablecoin framework can address these risks while unlocking the benefits. Key steps towards establishing such a framework include:
Several countries are already taking steps to regulate stablecoins. Singapore, for example, has implemented a regulatory framework for stablecoins pegged to the Singapore dollar, mandating issuers to maintain 100% reserve backing and adhere to stringent disclosure requirements. Japan has also established a clear legal framework for stablecoins, distinguishing them from other crypto assets. The European Union's Markets in Crypto-Assets (MiCA) framework has elevated global regulatory benchmarks.
The United States, after years of regulatory uncertainty, is now creating a more stable environment for crypto businesses, potentially influencing global adoption and prompting India to reconsider its cautious approach.
As India navigates the evolving landscape of cryptocurrency regulation, a stablecoin-first approach offers a promising path forward. By embracing innovation while implementing appropriate safeguards, India can unlock the potential of stablecoins to transform its financial system and drive economic growth. Industry experts believe that a structured regulatory approach could enable India to balance innovation with risk mitigation. Key steps could include drafting a comprehensive crypto regulation bill, establishing investor protection mechanisms, integrating stablecoins with the country's CBDC, reforming the current high tax regime to prevent capital flight, and fostering public-private collaboration.
India is scheduled for a Financial Stability Board (FSB) peer review in October 2025, which will assess the nation’s preparedness and alignment with international standards in the regulation of crypto-assets, demonstrating clear regulatory intent prior to this review is of paramount importance.
