India’s finance minister, Nirmala Sitharaman, has emphasized that innovations such as stablecoins are rapidly reshaping global finance, particularly in how money moves across borders. Countries may soon face stark decisions: either integrate with this evolving financial system or risk being left behind.
“Innovations like stablecoins are transforming the landscape of money and capital inflows. These shifts may force nations to make binary choices, adapt to new monetary architecture or risk exclusion. Such developments underscore the scale of transformation which is underway,” Sitharaman said in her speech at a recent event.
“They also remind us that no nation can insulate itself from the systemic changes. Whether we welcome these shifts or not, we must prepare to engage with them,” she added.
Currently, the global stablecoin market capitalization stands at $307 billion, up from $200 billion at the start of 2025. The United States has moved ahead with stablecoin legislation, while countries like the United Arab Emirates (UAE) and Bahrain are advancing their own digital currency infrastructure. Abu Dhabi has proceeded with its dirham-backed stablecoins while China is also exploring its own approach toward yuan-based stablecoins.
Sitharaman’s comments come as a surprise as well as a welcome shift in attitude towards new-age digital currency. India has traditionally treated digital assets with suspicion, imposing one of the most punitive taxes on their trading, while the Reserve Bank of India (RBI) has insisted on a complete ban, highlighting the risks associated with them. On the other hand, India’s markets regulator, the Securities and Exchange Board of India (SEBI), has voiced a more welcoming stand toward digital assets.
However, India is not looking at introducing comprehensive digital asset regulations at this stage. Instead, the federal government is likely to limit oversight due to concerns that fully incorporating digital assets into the broader financial system could lead to systemic risks.
Stablecoins could save India billions in remittance fees
Sumit Gupta, co-founder of CoinDCX, India’s first digital asset unicorn, said that it is encouraging to hear the finance minister acknowledge the growing relevance of stablecoins and emphasize that nations all over the world are now faced with a clear choice: either to engage with this emerging technology or risk being left behind.
“I personally believe that India should embrace stablecoins! India receives over $125B in remittances annually, and stablecoins can reduce costs from 6-7% to just 1-3% saving us billions in fees,” Gupta said in a LinkedIn post.
“India already has one of the world’s best fintech ecosystems and we have a great opportunity to embrace virtual digital assets and further leapfrog ahead in the digital revolution,” Gupta added.
According to Edul Patel, co-founder of Mudrex digital asset exchange, Sitharaman’s comments signal an essential shift in India’s approach toward digital assets, particularly stablecoins. Rather than questioning if the country should get involved, the focus is on how to engage with these innovations in a responsible manner. This change in attitude reflects a progressive policy approach that could help position India as a key player in the global fintech landscape.
“This is a significant development for the industry. For years, India has rightfully prioritized monetary sovereignty and stability through initiatives like the Digital Rupee. But now, these comments suggest a willingness to explore how regulated stablecoins can co-exist alongside existing innovations like a CBDC (central bank digital currency),” Patel said in a LinkedIn post.
“If implemented thoughtfully, stablecoins can save billions in remittance costs, making cross-border payments instant and affordable; improve financial transparency and liquidity, especially for global trade and fintech innovation; [and] complement, not compete with, the Digital Rupee, strengthening India’s monetary landscape both locally and globally,” Patel added.
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‘A utility for payments’
Sitharaman’s support for stablecoins comes days after Pradeep Bhandari, the national spokesperson for India’s ruling political party, the Bharatiya Janata Party (BJP), proposed an Indian-rupee-backed stablecoin. This would be a digital extension of the rupee itself, primarily serving as a utility for payments, backed one-to-one by government of India bonds.
According to Bhandari, a well-structured pilot for a digital rupee could pave the way for a more stable financial future for India. This proposal would not come into conflict with the RBI’s ongoing e-rupee or CBDC trials. In fact, both forms can coexist. While the e-rupee is a central bank-issued currency, the proposed digital rupee, or an Indian stablecoin, would be fully backed by government securities, Bhandari pointed out. Together, these two financial instruments can improve the rupee’s utility and influence across various economic scenarios.
“Stablecoins are emerging as a new class of digital assets designed for stability. Put simply, they are digital tokens backed by a sovereign currency such as the rupee, and settled 24×7 in real time over public blockchains. This blend of sovereign trust and technological efficiency is beginning to reshape global finance,” Bhandari wrote in an article for Moneycontrol.
“With its scale, talent, and financial depth, India has the capacity to lead in this space. A natural next step could be to consider a regulated, rupee-backed digital asset, what one might call a Digital Rupee. Such an instrument would not be speculative or experimental, but a stable, digital extension of the rupee itself, backed one-to-one by Government of India bonds. At its core, it would be a utility for payments — nothing more, nothing less,” Bhandari explained.
A regulated Indian stablecoin could offer the potential to take the rupee global, making it a trusted medium for trade, remittances, and digital finance. According to Bhandari, India has made substantial efforts to improve the global standing of the rupee over the past decade, including facilitating trade settlements with international partners and enhancing trust in the country’s financial systems. Building on this progress, a Digital Rupee could further solidify the rupee’s role by offering a faster, more cost-effective, and secure solution for cross-border payments, and supporting its adoption in international trade, remittances, and digital finance.
“India receives more remittances than any other country in the world, over ₹11 lakh crore ($132.5 billion) annually. Yet, many still face delays and significant transaction costs. A blockchain based Digital Rupee could help ease this process, enabling near real-time transfers at lower cost and on transparent networks that are live 24×7. For millions of households, such an innovation could directly improve everyday financial flows,” Bhandari clarified in his article.
Bhandari suggested that a gradual, trial-based rollout could be a sensible path ahead. India may start with targeted regions, such as West Asia, where there are strong trade relationships and a significant diaspora presence. Early use cases could focus on cross-border trade and non-resident Indian (NRI) remittances, laying the groundwork for broader adoption over time. In doing so, India is likely to strengthen the rupee and signal its readiness to lead in shaping the future rules of digital finance globally.
“Stablecoins are steadily moving from theory to practice in advanced economies. For us, with our capacity and vision, India is well placed to explore this opportunity. A carefully designed pilot Digital Rupee could be a step towards unlocking the stable way forward for the nation,” Bhandari added.
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Source: https://coingeek.com/india-adopts-stablecoins-shifting-to-digital-currency-strategy/