India's Chief Economic Advisor, V. Anantha Nageswaran, has warned that dollar-backed stablecoins could pose significant challenges to monetary policy and the issuance profit of countries. He stated that India faces less pressure to adopt stablecoins due to the fast payment system UPI, but is concerned that stablecoins will increase competition with banks.
The market value of global stablecoins has exceeded 300 billion USD thanks to favorable regulations in America. However, India still avoids enacting specific laws regarding cryptocurrency due to concerns about financial contagion risks. The RBI believes that managing cryptocurrency risks through regulation is very difficult.
Currently, the people of India hold approximately 4.5 billion USD in cryptocurrency. The government maintains a high tax policy and restricts banking - cryptocurrency transactions to reduce speculation and fraud.
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