RBI Urges Caution on Stablecoins' Impact on Economies

Key Points:* RBI’s T. Rabi Sankar warns about stablecoins’ risk to monetary policy.

• Stablecoins may weaken currency regulation, raise credit costs.
• Potential loss of seigniorage revenue from foreign stablecoins. On December 12, the Deputy Governor of the Reserve Bank of India warned that stablecoins may pose risks to monetary policy and local currency stability.

The concerns highlight potential impacts on economic sovereignty and financial stability, emphasizing the RBI’s preference for central bank digital currencies over private stablecoins.

RBI Urges Caution on Stablecoins’ Impact on Economies

Stablecoins may elevate credit costs substantially, posing challenges for emerging economies. Currency substitution effects and monetary sovereignty risks are among the primary concerns. RBI’s existing stance against private cryptocurrencies was reaffirmed at the summit, emphasizing a preference for central bank digital currencies over stablecoins.

“We are very clear in our mind that stablecoins do not serve a purpose that cannot be done better with CBDC (central bank digital currency), and introducing stablecoins would create a lot of policy concerns and issues that are best avoided.” – T. Rabi Sankar, Deputy Governor, Reserve Bank of India (RBI)

“We are very clear in our mind that stablecoins do not serve a purpose that cannot be done better with CBDC (central bank digital currency), and introducing stablecoins would create a lot of policy concerns and issues that are best avoided.” – T. Rabi Sankar, Deputy Governor, Reserve Bank of India (RBI)

Emerging Economies Face Policy Risks from Stablecoins

Did you know? Stablecoins have historically triggered debates over financial stability since their integration into broader markets, reflecting ongoing monetary policy challenges.

Ethereum (ETH) is trading at $3,247.89 with a market cap of $392.00 billion and a 12.48% market dominance, based on CoinMarketCap data as of December 12, 2025. Its trading volume declined by 30.51% to $23.96 billion recently. ETH’s price moved up 1.71% in the past 24 hours but faced a decline over 90 days, losing 31.19%.

Ethereum(ETH), daily chart, screenshot on CoinMarketCap at 10:32 UTC on December 12, 2025. Source: CoinMarketCap Coincu’s research suggests emerging economies risk policy independence losses due to stablecoins. However, well-managed central bank digital currencies could balance innovation with regulation, offering a path forward. Stablecoin usage amplifies existing nuances in monetary frameworks, yet central banks remain cautious.