Reduce friction: Let regulated stablecoins transform India's remittance economy
India's digital public infrastructure (DPI), led by the Unified Payments Interface (UPI), which now accounts for nearly half of all real-time payments made globally by volume, provides a robust foundation. By integrating global stablecoins with the Reserve Bank of India's (RBI) central bank digital currency (CBDC), the e-rupee—which is pegged to the rupee and thus a 'stablecoin' too—India can leverage blockchain technology to streamline remittances, ensure digital sovereignty and position itself as a global 'Web 3.0 Valley.'
Also Read: Agentic payments are here: Why India needs a rupee-based stablecoin
Stablecoins are cryptocurrencies pegged to stable assets such as the US dollar, gold or the rupee, ensuring that its value does not yo-yo by demand and supply and reflects what a well-known currency is worth. While they share blockchain technology—a decentralized, secure digital ledger online—with volatile cryptos like Bitcoin, their design and use cases differ entirely.
Cryptos like Bitcoin are used as speculative assets, but a stablecoin acts like a medium of exchange. In 2024, stablecoins facilitated $27.6 trillion of global transactions, surpassing Visa and Mastercard, according to the World Economic Forum. This proves their scalability for cross-border payments.
Also Read: Rupee-backed stablecoins could complement RBI's digital currency
India's 36 million diaspora sends over $100 billion home annually, often through banks or money transfer operators, such as Western Union, which charge $12.70 on average for a $200 transfer and take days to remit funds, due to intermediaries, checks and other processes.
Stablecoins enable peer-to-peer transfers: a diaspora member converts fiat currency into a stablecoin via a digital wallet and sends the sum instantly to the wallet in India of a recipient, who converts it to rupees. The fee ranges from 0.5% to 3% (as low as $0.01 for every $200 sent), with transactions done in minutes, 24/7. This efficiency can reduce transaction costs drastically, while reaching out to the under-banked.
India's DPI, with UPI atop Aadhaar, supports over 900 million smartphone users. The interface processed 185 billion transactions in 2024-25, with Aadhaar's 1.3 billion unique identities easing know-your-customer (KYC) verification.
RBI's digital rupee uses blockchain for secure, low-cost transactions, complementing private stablecoins. Integrating it with rupee-pegged stablecoins can create a hybrid ecosystem, aligning with the UN's goal of reducing remittance costs below 3% by 2030, and lowering reliance on dollar-based stablecoins as well as Swift. This would support India's digital sovereignty.
Also Read: India's economy in 2024: A stable growth path is now within sight.
RBI's 2023 regulatory sandbox promotes blockchain innovations while ensuring compliance with KYC and anti-money laundering regulations. RBI-regulated rupee-pegged stablecoins would allow for monetary control and attract foreign direct investment (FDI), with transparent payment trails.
For trade competitiveness, blockchain and tokenization would streamline exports by digitizing assets and embedding controls as well as limits within tokenized contracts for compliance and transparency. Tokenized trade assets would reduce reliance on costly bank guarantees by enabling the securitization of credit through smart contracts, lowering costs and delays in global trade.
While RBI may want the e-rupee to get priority in the emerging world of digital currencies, policy steps such as tax incentives for blockchain startups and public-private partnerships could help by accelerating stablecoin adoption.
India's 7.7 million gig workers and 4.5 million software service professionals face job displacement. Web 3.0, a decentralized internet powered by blockchain, could help future-proof India's workforce against AI and automation risks. It enables resilience through tokenized credentials—digital records on blockchain—that allow workers to verify skills and access decentralized job markets globally. A developer in India could present verified credentials to secure remote work on international platforms without intermediaries.
Also Read: The rupee's digital future is far more relevant than its domestic heritage
With 1.2 million developers, India can lead in 3.0 innovation. Training in blockchain skills like smart contract development can reskill workers. RBI's blockchain hackathons and the National Education Policy's focus on digital skills support this transition. Expanding vocational training and incentivising universities to offer Web 3.0 courses can prepare millions for emerging roles.
Digital forces are converging that enable India to position itself as a potential Web 3.0 Valley. RBI's digital pivot balances innovation with stability, even as its regulatory sandbox rivals Singapore's, attracting global capital for Web 3.0 startups. Regulated rupee-pegged stablecoins integrated with the e-rupee can ensure compliance and scalability. This can transform India's remittances by reducing transfer costs and increasing the money in hand for recipients.
Meanwhile, blockchain-driven tokenization could be used to enhance export competitiveness by digitizing aspects that need leaps in efficiency. By fostering Web 3.0 innovation, reskilling its workforce and putting agile policies in place, India could aim for global leadership in a critical domain.
The authors are, respectively, adjunct professor of data and digital economy, and senior policy manager, Digital India Foundation.
Hashtags
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
Time of India
13 minutes ago
- Time of India
America's debt time bomb: Markets could crash before 2026 midterm elections, says ex-IMF official!
The United States may be in line for a severe financial reckoning before the 2026 midterm elections. Desmond Lachman , a former deputy director at the International Monetary Fund, warned that the world is losing trust in the US dollar, and the United States could suffer a financial crisis next year, as reported by Fortune. Why is market trust in the US fading? In a new opinion piece for Project Syndicate, Lachman describes how a mix of rising debt, political turmoil, and declining confidence in US institutions are spooking markets and driving the dollar to record lows, as per the report. In Lachman's view, even before the start of US president Donald Trump's second term, the fiscal health of the nation was already beginning to show the pressure, according to Fortune. But matters have taken a very rapid turn as the sweeping new tax cuts recently signed into law are set to pile trillions onto the national deficit, as per the Fortune report. by Taboola by Taboola Sponsored Links Sponsored Links Promoted Links Promoted Links You May Like This Could Be the Best Time to Trade Gold in 5 Years IC Markets Learn More Undo ALSO READ: Bitcoin hits $121,000 - Rich Dad Poor Dad author Robert Kiyosaki urges newcomers: Reflect before it's too late What's driving concerns about a crisis? At the same time, Trump's hard-hitting tariffs and repeated pressure on the Federal Reserve to cut interest rates are fuelling inflationary fears and further rattling world confidence in the US economy, according to the report. He also pointed out that, 'Add to that Trump's apparent disregard for the rule of law, and markets see little reason to trust the US,' as quoted in the Fortune report. Live Events How is the US dollar performing? According to him, this could be the reason that the US dollar fell 10% against other top global currencies in the first half of the year, marking the greenback's worst such performance since 1953, as reported by Fortune. ALSO READ: Air taxi revolution? Joby Aviation doubles output, investors react fast, stock skyrockets 7% What's gold telling us about investor confidence? Lachman pointed out that gold increasing 25% this year is another sign of collapsing market confidence in the United States, as are Treasury yields remaining elevated despite market turbulence, according to the report. Can Donald Trump pressure markets like he does politicians? He said that, 'The problem for Trump is that, unlike politicians, markets cannot be pressured or primaried,' while referring to the threat of ousting disobedient lawmakers via primary elections, as reported by Fortune. Lachman added that, 'If he refuses to heed investors' warnings, as seems likely, the US should brace for a dollar and bond-market crisis in the run-up to next year's midterm elections. The days of the world letting America live beyond its means are rapidly coming to an end,' as quoted in the report. Are others echoing these concerns? While the fixed income portfolio manager at Capital Group, John Queen, recently wrote in a client note that, 'Many people have predicted that catastrophe is right around the corner and, someday, one of them is going to be right,' as quoted by Fortune. Queen added that, 'Unfortunately, they are just guessing, so I am not going to predict that. I am instead going to say that I think the market is good at pricing in those concerns,' as quoted in the report. FAQs Is the US heading toward a financial crisis? It's possible, according to former IMF official Desmond Lachman, especially if current economic trends continue unchecked. Why is the US dollar losing value? Lachman says it's due to rising debt, inflation fears, and eroding trust in political and financial leadership, as per the Fortune report.
Time of India
35 minutes ago
- Time of India
Currency watch: Rupee rises 16 paise to 85.76 against dollar; crude oil slide & weak greenback lift sentiment
The rupee appreciated by 16 paise to settle at 85.76 against the US dollar on Tuesday, helped by a weaker greenback and softer crude oil prices globally. However, persistent foreign fund outflows and uncertainty surrounding the ongoing India-US trade negotiations limited the currency's upward movement, according to forex dealers. At the interbank foreign exchange market, the rupee opened at 85.97 and moved in a tight range between 85.75 and 85.97 during the session. It eventually ended the day at 85.76, recovering from its previous close of 85.92, PTI reported. "The Reserve Bank of India has been guarding the rupee at the 86.00 level and on Tuesday also ensured that the rupee opens a tad higher than 86," said Anil Kumar Bhansali, Head of Treasury and Executive Director at Finrex Treasury Advisors LLP. He added, "For tomorrow (Wednesday), we expect the rupee to be in the range of 85.50–86.10 with expectations of more flows." Dollar, crude prices ease The dollar index, which tracks the US currency against a basket of six peers, declined 0.11% to 97.97, supporting emerging market currencies. Brent crude, the global oil benchmark, was down 0.43% to $68.91 per barrel in futures trade, reducing pressure on India's import bill. Trade talks and equity flows in focus The gains in the rupee were tempered by ongoing concerns over the outcome of bilateral trade negotiations between India and the US. by Taboola by Taboola Sponsored Links Sponsored Links Promoted Links Promoted Links You May Like Đây có thể là thời điểm tốt nhất để giao dịch vàng trong 5 năm qua IC Markets Tìm hiểu thêm Undo A team from India's commerce ministry is currently in Washington for the latest round of discussions on the proposed bilateral trade agreement. The four-day meeting began on Monday and is set to conclude on Thursday. M eanwhile, India's merchandise exports held steady at $35.14 billion in June, while the trade deficit narrowed to a four-month low of $18.78 billion, according to government data released Tuesday. On the domestic equities front, both benchmark indices ended in the green. The Sensex rose 317.45 points to close at 82,570.91, and the Nifty advanced 113.50 points to settle at 25,195.80. Foreign institutional investors (FIIs) were net buyers on the day, purchasing equities worth Rs 120.47 crore, according to stock exchange data. Stay informed with the latest business news, updates on bank holidays and public holidays . AI Masterclass for Students. Upskill Young Ones Today!– Join Now
Time of India
35 minutes ago
- Time of India
When Rs 12 beats Rs 175: Bengaluru founder snubs costly auto prices, uses cheaper option to protest ‘stupid fares'
Swapnil Jain , co-founder of Ather Energy , did not expect a normal Monday morning commute to kick up such noise. He had both his vehicles parked at the office, so when he needed to get back, he tried the usual option. 'For various reasons, both my vehicles were parked at the office and I had no ride. Tried booking an auto because it is only 4 kms, but the price was ₹175. Heck with it, just decided to take a bus to office at ₹12,' he posted on X. And that was that. Or so he thought. 'Protesting stupid auto prices' Calling it what it was, Jain wrote, 'This is me protesting against the stupid auto prices.' — swapniljain89 (@swapniljain89) Live Events The phrase struck a chord. In Bengaluru, short auto rides turning costly is nothing new. Jain's public refusal felt relatable for many. His ₹12 bus ticket said more than a rant ever could. UPI payment, no loose change There was more to this than the fare. Jain pointed out that BMTC's UPI option makes life easier. No awkward wait for coins. No hunting for change in the pocket. He also gave a nod to Switch Mobility's electric buses . Comfortable enough, he said. A slight lag in acceleration did not bother him much. He figured it was down to shifting passenger weight. Bengaluru joins in The post caught on. Others began to chip in with their own stories. One user wrote, 'BMTC has been my primary mode for the last 1 year. Other than the sudden acceleration or braking, no complaints. No issue with frequency (500D), and no last-mile connectivity issues either.' Someone else shared, 'Use the Namma BMTC app for live tracking. It's not perfect, but it works. Pair it with UPI and you're sorted.' Another liked Jain's small stand, saying, 'I like how you don't waste money on simple things. It's not just about saving ₹100- ₹150, it's about staying grounded in the roots we come from.' Of course, not everyone clapped along. One user poked fun at Jain's scooters. 'Same way we don't want to waste money on your scooters that stop when there's a pillion rider. You call that derating? Hilarious!' the user said. Someone found fault with the buses too. 'Why can't the floor be flat? Too many steps inside, feels like climbing into an auditorium,' read another reply. Others dropped tips. 'You can get daily passes through the Tummoc app too. Also, airport buses on the BMTC app are really accurate.' Under it all, this was not only about a short bus ride. Jain's post pulled out an old complaint Bengaluru commuters share quietly every day. Auto fares that feel random. The relief when the bus turns up on time. Small fixes like paying through an app. 'Needed a rick in the rain, guess who's charging Rs 175 for 3 km? Rapido!' another user added, showing this is not one man's story. Swapnil Jain's choice to spend twelve rupees instead of one seventy-five will not overhaul Bengaluru's transport overnight. But it has pushed a simple idea back into the open. Sometimes a bus ride is worth more than it costs. And a small protest can make people pause and think before hailing the next pricey rick.
