Rebecca Cruz The Reserve Bank of India calls on global regulators to prioritize central bank digital currencies over stablecoins, highlighting the risks to financial stability and the importance of preserving trust in money.
India’s Central Bank Pushes Global Focus Toward CBDCs Over Stablecoins
In a decisive statement that underscores India’s digital currency stance, the Reserve Bank of India has urged countries to prioritize central bank digital currencies over stablecoins. The regulator believes that sovereign digital currencies represent the future of money and the backbone of financial stability, while privately issued tokens could create vulnerabilities during market turbulence.
As central banks worldwide explore digital innovation, the call from India’s monetary authority places renewed emphasis on developing an official digital currency that maintains the integrity and trust of national financial systems.
RBI warns stablecoins could destabilize financial systems
According to the latest Financial Stability Report, the Reserve Bank of India considers central bank digital currencies to be the ultimate form of settlement in a digital economy. The institution argues that these sovereign-backed assets preserve the singleness of money, ensuring that all transactions, whether public or private, continue to rely on a unified and trusted monetary base.
In contrast, stablecoins, which are pegged to fiat currencies but issued by private entities, introduce new layers of systemic risk. The RBI emphasized that in times of market stress, the redemption or volatility of these tokens could amplify instability, especially in emerging economies.
The report cautioned that financial authorities must carefully evaluate such risks and design policies that safeguard their monetary ecosystems. For India, the approach remains clear central bank digital currencies should take precedence as the next-generation infrastructure for payments, capable of providing faster and cheaper settlement without compromising monetary sovereignty.
CBDCs can do what stablecoins promise but better
The Reserve Bank of India reiterated that central bank digital currencies offer all the key advantages that stablecoins promote, including efficiency, programmability, and real-time settlement. However, the difference lies in their backing. Since CBDCs are issued directly by central banks, they carry the same credibility and assurance as traditional sovereign money.
In the report, the RBI stated that central bank digital currencies represent the safest path toward modernizing payments without losing trust in national monetary systems. The regulator also noted that while stablecoins have attracted significant adoption across the United States, Europe, and parts of Asia, they remain privately governed and could become parallel forms of money without the same accountability or oversight.
Data from DeFiLlama reveals that the global stablecoin market has grown significantly, with market capitalization rising from about 205 billion dollars at the start of 2025 to over 307 billion dollars by the end of the year. Yet, despite this surge, the Reserve Bank of India remains firm in its position that the long-term future of digital transactions lies with official currencies rather than privately managed digital assets.
Global CBDC rollout remains slow but growing
Despite strong interest and pilot programs worldwide, central bank digital currencies are still in their early stages. According to the Atlantic Council’s CBDC tracker, only three countries Nigeria, the Bahamas, and Jamaica—have fully launched CBDCs to date. Another forty-nine are running pilot programs, while twenty are developing the technology and thirty-six are conducting research.
These figures highlight both the ambition and the caution surrounding sovereign digital currency adoption. Many governments remain concerned about implementation challenges, including privacy, cybersecurity, and the impact on traditional banking systems. Critics worry that CBDCs could give governments more direct access to financial data, potentially compromising individual privacy.
Still, proponents argue that with proper design, CBDCs could improve financial inclusion, reduce transaction costs, and streamline global payments. The Reserve Bank of India’s stance reflects this vision, aiming to position India as a leader in digital finance while protecting the integrity of its monetary framework.
India’s cautious but forward-looking digital strategy
India has been steadily advancing its digital economy agenda, with the government indicating plans to regulate stablecoins while allowing room for innovation in the sector. The Economic Survey 2025–2026 confirmed that stablecoin regulations are under review, signaling that India aims to strike a balance between fostering innovation and ensuring financial safety.
The Reserve Bank of India’s call for prioritizing central bank digital currencies underscores its cautious yet forward-looking approach. It envisions a system where sovereign digital money coexists with regulated financial technology, maintaining the trust and stability that underpin economic growth.
For now, India’s pilot CBDC programs and its clear message to global regulators position it as a significant voice in shaping the international conversation on digital currencies. As countries race to modernize their monetary systems, the debate between CBDCs and stablecoins continues but for India, the direction is unmistakably toward a sovereign digital future.
Disclaimer: Parts of this article were generated with the assistance from AI tools and reviewed by our editorial team to ensure accuracy and adherence to our standards.
