The RBI official dismissed the advantages claimed by stablecoin proponents, noting that India’s present cost infrastructure already gives environment friendly options.
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Reserve Financial institution of India (RBI) Deputy Governor T Rabi Sankar stated stablecoins lack the essential attributes of cash and pose important dangers to financial stability, successfully ruling out their integration into India’s monetary system.
“Stablecoins fail to fulfill the 2 defining options of recent cash, viz., (i) cash as fiat and (ii) singleness of cash,” Sankar stated on the Mint Annual BFSI Conclave 2025 in Mumbai on December 12, 2025. “It’s attainable that in a stablecoin system, there could be tons of, or extra, of currencies in an economic system making any such system inherently unstable.”
The RBI official dismissed the advantages claimed by stablecoin proponents, noting that India’s present cost infrastructure already gives environment friendly options. “Within the home area, real-time quick cost programs reminiscent of UPI already allow quick, low-cost, and dependable funds, and there’s no cause to consider that stablecoins could be superior from the viewpoint of value or pace or reliability,” he stated.
Sankar recognized a number of dangers that stablecoins pose to India’s monetary system. “Widespread adoption of stablecoins would undermine Central banks’ capacity to manage cash provide and rates of interest,” he stated, including that they may result in foreign money substitution and dollarisation in rising markets.
Credit score conundrum
The banking sector faces explicit threats from stablecoin adoption. “To the extent stablecoins change financial institution deposits, banks would lose their position in monetary intermediation,” Sankar stated. “This might consequence both in an increase in value of credit score as banks lose entry to low-cost deposits, or banks having to depend upon the Central financial institution to offer the liquidity required to fund credit score.”
The RBI deputy governor additionally highlighted the lack of seigniorage earnings to governments. “Seigniorage, which is inherently a sovereign income arising from the issuance of fiat cash by the Central financial institution, is thus diverted to non-public operators, typically situated exterior the house jurisdiction, if stablecoins are dominated in a international foreign money,” he stated.
As an alternative of stablecoins, Sankar advocated for Central Financial institution Digital Currencies because the superior different. “CBDCs are digital tokens like stablecoins but they’re inherently superior since they fulfill all of the attributes that cash ought to have – fiat, single, trusted and representing worth – and don’t pose lots of the dangers related to stablecoins,” he stated.
He referred to as for India to deal with 4 key ideas: preserving belief within the nationwide foreign money; safeguarding financial sovereignty; encouraging accountable innovation via CBDCs, and guaranteeing innovation strengthens the regulated monetary system.
“Do stablecoins serve a objective? It appears to me that they don’t; at any fee, they don’t serve a objective that can not be served higher by fiat cash,” Sankar concluded.
Printed on December 12, 2025
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