Using stablecoins for payments might soon be allowed in India
What's the story
The Indian government is considering the use of stablecoins, a type of cryptocurrency, for transactions. This was revealed by Moneycontrol, which cited a government official familiar with the matter. Stablecoins are cryptocurrencies whose value is tied to another asset such as fiat currency or commodity. They are designed to maintain price stability unlike other volatile cryptocurrencies like Bitcoin and Ethereum.
Regulatory framework
Government's approach toward stablecoins
The Indian government is yet to establish a regulatory framework for cryptocurrencies. However, it is exploring the possibility of using stablecoins for transactions. The Economic Survey 2025-26 may advocate their acceptance as legal tender for select transactions. A government official said, "We need to be in sync with the developments happening around the world. So, we need a framework to deal with stablecoins."
Monetary transformation
Finance Minister's views on stablecoins
At the Kautilya Economic Conclave in October, Finance Minister Nirmala Sitharaman had said that "innovations like stablecoins are transforming the landscape of money and capital flows." She added these changes could force countries to make binary choices: adapt to new monetary architectures or risk exclusion. Currently, cryptocurrencies lack a regulatory framework and aren't recognized as legal tender in India.
Regulatory discussion
Discussion paper on cryptocurrency regulation
The Indian government has prepared a discussion paper on cryptocurrencies, which is yet to be made public. According to Moneycontrol, the paper will highlight potential technological benefits of cryptocurrencies, especially stablecoins. It won't take a definitive stand on regulation but will suggest different treatments for different crypto assets like Bitcoin and stablecoins. The US recently introduced the GENIUS Act to create a regulatory framework for dollar-backed payment stablecoin issuers.
Diverse opinions
Industry perspectives on stablecoins
At the CII-Financing Summit in Mumbai, the payments sector claimed that fiat-backed stablecoins could modernize cross-border transfers. However, capital market stakeholders warned it could weaken regulatory oversight. Visa's Group Country Manager Sandeep Ghosh said stablecoins might bring scale, speed and lower costs to remittances and cross-border payments. However, NSE CEO Ashish Chauhan cautioned this form of cryptocurrency could undermine money laundering prevention frameworks and expose markets to manipulation.