RBI Deputy Governor dismisses need for stablecoins in India
13 Dec 2025

T Rabi Sankar, the Deputy Governor of the Reserve Bank of India (RBI) has dismissed the need for stablecoins in India's financial system.

He said that these digital currencies do not have a promise to pay, which is one of the defining features of money.

Sankar made these remarks while speaking at an event in Mumbai.

Stablecoins lack essential characteristics of money
Money attributes

Sankar emphasized that stablecoins do not meet the two defining features of modern money: "money as fiat and singleness of money."

He warned that a stablecoin system could result in multiple currencies, making it inherently unstable.

The Deputy Governor also said that cryptocurrencies are fundamentally speculative, drawing parallels to the tulip mania in the 17th century.

They could undermine monetary policy
Policy risks

Sankar also highlighted the potential risks of stablecoins, including price volatility and their impact on central banks' ability to conduct monetary policy.

He said that the benefits touted by stablecoin advocates are already being provided by India's existing payment infrastructure.

"Real-time fast payment systems such as UPI already enable fast, low-cost, and reliable payments," he added.

Stablecoins could disrupt financial intermediation
Intermediation concerns

Sankar warned that widespread adoption of stablecoins could undermine central banks' control over money supply and interest rates.

He said this could lead to currency substitution and dollarization in emerging markets.

The banking sector, in particular, could be threatened by stablecoin adoption as it may replace bank deposits and disrupt financial intermediation.

Seigniorage income loss and CBDCs as an alternative
Alternative solutions

Sankar also highlighted the potential loss of seigniorage income to governments if stablecoins dominate in a foreign currency.

He proposed Central Bank Digital Currencies (CBDCs) as a better alternative to stablecoins.

"CBDCs are digital tokens like stablecoins yet they are inherently superior since they satisfy all the attributes that money should have," he said.