20 July 2026
RBI Deputy Governor Believes Stablecoins Poses Bigger Economic Threat
Recently, the Indian central bank governor said stablecoins pose a bigger threat to economic stability than other Cryptocurrencies. He also highlighted a need for central bank digital currencies (CBDCs) to catch up with a boom in digital payments.
During a webinar, the deputy governor of the Reserve Bank of India ( RBI), T Rabi Sankar, said that stablecoins could spur dollarization at an unprecedented pace, given their 1:1 peg against the greenback. In dollarization, the dollar greatly dominates a country’s foreign exchange markets, sidelining the local currency and hurting financial stability.
By introducing CBDC, such a scenario could be avoided, according to Sankar. Additionally, CBDC will reduce the cost of digital payments while increasing its efficiency.
Sankar highlighted the cautious stance adopted by the RBI against Crypto. He said Crypto is unlikely to be used for small payments, citing volatility as the main deterrent to their use.
However, he believes a bigger economic threat would come from stablecoins which could cause the rupee to be sidelined in favor of the dollar.
Sankar has been against the Crypto adoption, calling the space a Ponzi scheme. He criticized Crypto’s underlying philosophy of trying to bypass the regulated financial system.
According to him, India has a nationalized digital payments platform called UPI, which lessens the need for Crypto payments.
Disclaimer: The author’s thoughts and comments are solely for educational reasons and informative purposes only. They do not represent financial, investment, or other advice.
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