RBI Governor Demands Global CBDC Adoption Over ’Risky’ Stablecoins

Central banks worldwide face a critical choice: embrace sovereign digital currencies or risk ceding monetary control to private stablecoin issuers.

The Digital Currency Divide

India's central bank chief just threw down the gauntlet, urging international regulators to prioritize CBDC development over accommodating stablecoins. The message couldn't be clearer - national monetary sovereignty trumps corporate crypto ambitions.

Behind the Policy Push

This isn't just theoretical debate. With multiple nations already piloting digital currencies and stablecoins processing trillions in transactions, the battle for the future of money is accelerating. Central bankers see stablecoins as Trojan horses - privately issued assets that could eventually challenge their monetary authority.

Global Implications

The RBI's position signals growing institutional resistance to parallel currency systems. Expect more heated discussions at upcoming G20 meetings as developed and emerging economies grapple with this digital currency dilemma.

Because nothing says 'financial stability' like letting tech companies print their own money - what could possibly go wrong?

Domestic payments are efficient, and CBDCs focus on cross-border use

Malhotra clarified that India’s domestic payment systems are already efficient, fast, and low-cost. “For India, domestic payments are not an issue. To that extent, we do not need a CBDC or a stablecoin for local payments,” he said. Instead, CBDCs are being piloted to enhance cross-border transactions.

Currently, the RBI is running pilot programs for both retail and wholesale CBDCs. The Governor said that while cryptocurrencies and stablecoins show promise in asset tokenization, they “fall short as the mainstay for monetary systems” and carry risks for monetary policy, capital controls, and financial integrity.

“We believe in India it is the CBDC and not crypto, because [crypto] has huge implications for monetary policy, for controls on the capital account, and for money laundering. We would rather promote CBDC than any other FORM of crypto, because CBDC has all the advantages,” Malhotra added.

Government signals shift on stablecoins

Malhotra’s comments come shortly after Finance Minister Nirmala Sitharaman suggested a potential shift in the government’s stance on stablecoins. At the Kautilya Economic Conclave earlier this month, Sitharaman noted that innovations like stablecoins are transforming money and capital flows.

“Such developments underscore the scale of the transformation underway. They also remind us that no nation can insulate itself from systemic change. Whether we welcome these shifts or not, we must prepare to engage with them,” she said on October 3 in New Delhi.

Rupee policy and market intervention

On the currency front, Malhotra reiterated that the RBI does not target any specific level for the rupee. He acknowledged the impact of U.S. tariffs and geopolitical tensions on the currency but emphasized that the central bank’s role is to ensure orderly market movement and curb excessive volatility. 

The RBI intervened heavily on Wednesday to support the rupee, which had been under pressure, keeping it from breaching the all-time low of 88.80 last touched on September 30.

Looking ahead

Malhotra also noted India’s strong economic growth, describing it as “phenomenal,” with potential upside to the RBI’s growth forecast of 6.8% for 2025-26 if U.S. tariff issues are resolved. Overall, the Governor underscored India’s commitment to promoting CBDCs globally while maintaining a robust domestic financial system.

Also Read: India’s crypto Paradox: Ads, Ambassadors, and a Silent Policy