Former RBI Executive Urges India to Clarify Stablecoin Policy
G Padmanabhan, former RBI executive director, called on the Indian government to take a clear stance on stablecoins. He warned that delaying a decision could cause uncertainty similar to what happened with cryptocurrencies.
Speaking at a prelude event for the Global Fintech Festival 2025, Padmanabhan, now an advisor to the Payments Council of India, said, “Stablecoin is quite a different proposition from crypto, and India as part of the global ecosystem has to take a view one way or the other very quickly.”
He recommended that regulators hold detailed, closed-door discussions on stablecoin rules. Padmanabhan stressed the need to align India’s approach with global trends, especially after the US advanced its e-currency framework.
India’s Cautious Approach to Cryptocurrencies
The Indian government treats stablecoins and cryptocurrencies differently. A recent government document reviewed by Reuters shows India does not plan to create a full legal framework for cryptocurrencies.
Instead, authorities prefer partial oversight. They cite risks to the financial system if cryptocurrencies become fully mainstream. The document states, “Regulating cryptocurrencies would effectively give them legitimacy,” which could increase systemic risks.
However, the government acknowledges that banning cryptocurrencies entirely is unrealistic. Peer-to-peer transfers and decentralized trades will continue despite restrictions.
Need for Clear Stablecoin Rules
Padmanabhan’s remarks highlight the urgency for India to finalize stablecoin regulations. Clear rules can help advance digital payments and protect the financial system.
They will also ensure India remains aligned with global financial developments.
