RBI Governor Warns Crypto and Stablecoins Pose Systemic Risks to India’s Financial Stability
Reserve Bank of India Governor Sanjay Malhotra has escalated warnings against cryptocurrency adoption, framing private digital assets as a potential destabilizing force for emerging markets. The caution contrasts sharply with the U.S.'s strategic embrace of Bitcoin as a reserve asset.
At a Delhi School of Economics lecture, Malhotra highlighted how dollar-pegged stablecoins could erode monetary sovereignty. 'When synthetic dollars circulate outside our regulatory perimeter, they create blind spots in monetary policy transmission,' he stated, alluding to the $150B global stablecoin market.
Deputy Governor T. Rabi Sankar reinforced the stance, dismissing unbacked cryptocurrencies as 'monetary phantoms' while acknowledging asset-backed stablecoins present more nuanced risks. The RBI prefers its digital rupee CBDC as a controlled alternative.
