RBI Warns: Stablecoins Threaten India's Monetary Sovereignty, Financial Stability

• RBI states widespread stablecoin adoption poses significant risks to India's monetary sovereignty and financial stability.
• Stablecoins lack foundational requirements of sound money like singleness, elasticity, and integrity.
• Foreign currency stablecoins can erode monetary control and weaken domestic monetary policy transmission.
• RBI advocates for Central Bank Digital Currencies (CBDCs) over private stablecoins to maintain trust and financial stability.
• Stablecoins are volatile, vulnerable to shocks, can circumvent capital controls, and be exploited for illicit financing.

Why It Matters: RBI cautions against stablecoins, citing risks to monetary sovereignty and financial stability, favoring CBDCs.