RBI Governor Urges Global Focus on CBDCs Over Stablecoins
Reserve Bank of India (RBI) Governor Sanjay Malhotra called on central banks worldwide to prioritize Central Bank Digital Currencies (CBDCs) instead of stablecoins. He made the remarks at the annual World Bank and IMF meeting in Washington, DC.
Malhotra highlighted CBDCs’ benefits over private cryptocurrencies. In a discussion with Krishna Srinivasan, IMF Asia-Pacific Director, he said, “Unless other countries also adopt CBDC, we are not going to see the benefits of CBDC insofar as cross-border payments are concerned.” He urged central banks to promote CBDCs for their advantages over stablecoins.
He explained that CBDCs are fiat-backed and maintain the “singleness of money” and its integrity. Malhotra stressed that broad adoption is essential to unlock CBDCs’ full potential in international payments.
India’s Domestic Payments and CBDC Pilots
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, India is piloting CBDCs to improve cross-border transactions.
The RBI is currently testing both retail and wholesale CBDCs. Malhotra noted that while cryptocurrencies and stablecoins show promise in asset tokenization, they pose risks to monetary policy, capital controls, and financial integrity.
He added, “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.”
Government Signals Changing View on Stablecoins
Malhotra’s remarks follow Finance Minister Nirmala Sitharaman’s recent comments suggesting a shift in India’s stance on stablecoins. At the Kautilya Economic Conclave on October 3, she said 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,” Sitharaman said in New Delhi.
Rupee Policy and Market Intervention
Malhotra reiterated that the RBI does not target a specific rupee level. He acknowledged that U.S. tariffs and geopolitical tensions affect the currency. The RBI’s role is to ensure orderly market movement and limit excessive volatility.
The central bank intervened heavily on October 15 to support the rupee. This action prevented the currency from falling below its all-time low of 88.80, last reached on September 30.
India’s Economic Outlook
Malhotra described India’s economic growth as “phenomenal.” He said growth could exceed the RBI’s 6.8% forecast for 2025-26 if U.S. tariff issues ease. He emphasized India’s commitment to promoting CBDCs globally while maintaining a strong domestic financial system.
