Key Takeaways:
India’s central bank is urging governments to prioritize CBDCs over privately issued stablecoinsThe RBI argues stablecoins could amplify financial instability during market stressDespite growing stablecoin adoption globally, CBDC rollout remains slow and limitedIndia is weighing stablecoin regulation, but the RBI continues to favor sovereign digital moneyA Clear Policy Signal From India’s Central Bank
India’s central bank has issued a firm warning to policymakers: central bank digital currencies should take precedence over stablecoins as countries modernize their payment systems.
In its December Financial Stability Report, the Reserve Bank of India framed CBDCs as the only digital money capable of preserving the “singleness of money” – a principle it views as foundational to trust, settlement finality, and financial stability.
The message is unambiguous. While stablecoins may offer speed and programmability, the RBI believes they introduce new systemic risks that could surface sharply during periods of market turmoil.
Why the RBI Sees Stablecoins as a Stability Risk
According to the report, privately issued stablecoins can create parallel monetary systems that operate outside direct sovereign control. In stressed market conditions, these instruments could accelerate capital flight, liquidity mismatches, or confidence shocks – particularly in emerging economies.
The RBI cautioned that jurisdictions must carefully evaluate how stablecoins interact with their domestic financial systems before allowing them to scale. Unlike central bank money, stablecoins depend on issuer credibility, reserve management, and legal clarity – variables that may fracture under pressure.
By contrast, CBDCs are positioned as the ultimate settlement asset, backed directly by the central bank and designed to anchor trust in the monetary system.
India’s Policy Divide: Regulation vs. Caution
India’s government has signaled openness to exploring stablecoin regulation in its Economic Survey for 2025–2026. However, the RBI remains the more conservative voice in the room, consistently advocating restraint when it comes to crypto-linked instruments.
As the country’s monetary authority, the RBI is expected to play a decisive role in shaping how digital assets are treated – particularly where they intersect with payments, capital flows, and monetary policy transmission.
The divergence highlights a familiar global tension: governments weigh innovation and competitiveness, while central banks prioritize stability and control.
More News: Japan’s SBI and Startale Team Up to Build a Fully Compliant Yen Stablecoin for Global Use
Global Reality Check: CBDCs Still Rare
Despite years of discussion, CBDC deployment remains limited. Data from the Atlantic Council shows that only Nigeria, the Bahamas, and Jamaica currently operate live CBDCs.
Dozens of other countries remain in pilot or research phases, underscoring how complex and politically sensitive CBDC implementation can be.
Meanwhile, stablecoins continue to gain traction. According to DeFiLlama, total stablecoin market capitalization climbed sharply through 2025, reflecting growing use in cross-border payments and on-chain finance – even as regulators debate their long-term role.
For more information on stablecoin adoption and blockchain innovation globally, keep checking Castlecrypto News.