India\u2019s central government is closely examining the potential role of stablecoins, with officials indicating that the Economic Survey 2025-26 may \u201cpresent a case\u201d for recognising stablecoins for certain types of transactions. Although cryptocurrencies currently operate without any regulatory framework in India, the government is now exploring whether stablecoins can be tested in a controlled environment before evaluating their broader utility.<\/p>\n
According to a government official, India is considering an \u201cexperiment\u201d with stablecoins before permitting them for transactional use. The official noted that global developments make it necessary for India to build a framework for stablecoins.<\/p>\n
\n\u201cWe need a framework to deal with stablecoins\u2026 first, we have to check its utility and see if the banking system is equipped to handle stablecoin transactions,\u201d the official said.<\/p>\n<\/blockquote>\n
Stablecoins are cryptocurrencies whose value is tied to a stable asset such as a fiat currency (e.g., the US dollar) or commodities. Unlike volatile cryptocurrencies such as Bitcoin or Ethereum, stablecoins attempt to maintain a constant value.<\/p>\n
Economic Survey May Present Case for Recognition<\/h2>\n
The Economic Survey 2025-26 may highlight why stablecoins could be recognised for specific use-cases. This could potentially mark the first formal mention of stablecoin utility in an official government document.<\/p>\n
As of now, India has no legal framework governing cryptocurrencies, and they are not recognised as legal tender. The government has prepared a discussion paper on crypto, though it has not yet been released publicly.<\/p>\n
The paper is expected to outline:<\/p>\n
\n
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Potential technological advantages of cryptocurrencies<\/p>\n<\/li>\n
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different treatment for Bitcoin, stablecoins, and other digital assets<\/p>\n<\/li>\n
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The possibility of using stablecoins for global payments<\/p>\n<\/li>\n
- \n
References from the US legislative developments<\/p>\n<\/li>\n<\/ul>\n
Also Read<\/strong>:Bitcoin Falls Over 30% From October High as Market Turns Risk-Off<\/a><\/em><\/p>\n
Global Developments Being Considered<\/h2>\n
The government is also assessing international examples. The United States introduced the GENIUS Act in July to regulate dollar-backed payment stablecoin issuers, offering a clearer structure for stablecoin transactions.<\/p>\n
India\u2019s upcoming paper may draw cues from such global guidelines and evaluate whether stablecoins should be regulated differently from other cryptocurrencies.<\/p>\n
Diverging Views Within the Financial Ecosystem<\/h2>\n
Stakeholders in India\u2019s financial ecosystem have mixed views on the possible introduction of stablecoins.<\/p>\n
Payments Industry Perspective<\/h3>\n
At the CII-Financing Summit in Mumbai on November 17, Visa\u2019s Group Country Manager Sandeep Ghosh said stablecoins could modernise cross-border payments by offering:<\/p>\n
\n
- \n
more scale<\/p>\n<\/li>\n
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faster processing<\/p>\n<\/li>\n
- \n
lower costs<\/p>\n<\/li>\n<\/ul>\n
Capital Markets\u2019 Concerns<\/h3>\n
NSE CEO Ashish Chauhan warned that stablecoins may:<\/p>\n
\n
- \n
Weaken regulatory oversight<\/p>\n<\/li>\n
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complicate money-laundering prevention<\/p>\n<\/li>\n
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expose financial markets to manipulation<\/p>\n<\/li>\n<\/ul>\n
RBI\u2019s Preference for CBDCs Over Stablecoins<\/h2>\n
The Reserve Bank of India continues to maintain a clear stance against cryptocurrencies.<\/p>\n
RBI Governor Sanjay Malhotra has urged global central banks to prefer Central Bank Digital Currencies (CBDCs) instead of stablecoins for international payments.<\/p>\n
The RBI is currently piloting:<\/p>\n
\n
- \n
Retail CBDC<\/p>\n<\/li>\n
- \n
Wholesale CBDC<\/p>\n<\/li>\n<\/ul>\n
Malhotra recently reiterated that cryptocurrencies have implications for monetary policy, capital flows, and money laundering risks.<\/p>\n
Experts Call for Sandbox Testing<\/h2>\n
Market experts believe stablecoins should be treated as speculative assets because their price stability depends on the asset they are pegged to.<\/p>\n
Vivek Iyer, Partner at Grant Thornton Bharat, said a sandbox environment under the Department of Financial Services would help study the risks associated with stablecoins. Such analysis could guide future regulations.<\/p>\n
India is Still at the Discussion Stage<\/h2>\n
With no regulatory framework and no legal recognition for cryptocurrencies, India is moving cautiously. The government is weighing:<\/p>\n
\n
- \n
global trends<\/p>\n<\/li>\n
- \n
domestic financial system preparedness<\/p>\n<\/li>\n
- \n
risks related to volatility, fraud, and regulation<\/p>\n<\/li>\n
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benefits in payments and technology<\/p>\n<\/li>\n<\/ul>\n
The final approach\u2014whether to allow stablecoins in limited use cases or to build a broader regulatory structure\u2014will depend on the findings presented in the upcoming Economic Survey and the crypto discussion paper.<\/p>\n
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