Mumbai: Reserve Bank Deputy Governor T Rabi Sankar on Thursday said the stablecoins carry huge risks for “policy sovereignty”, and hinted that India will avoid the introduction of the instrument even though it is asset-backed.
With domestic liquidity conditions showing some signs of challenges, Sankar said the RBI will ensure that there is no scarcity of money for productive purposes. “Economic activity will not suffer because of liquidity reasons,” he assured.
“We are very clear in our mind that stablecoins do not serve a purpose that cannot be done better with CBDC (central bank digital currency), and introducing stablecoins would create a lot of policy concerns and issues that are best avoided,” Sankar said during an event hosted by Business Standard here. Admitting that, unlike cryptocurrencies, bitcoin and stablecoins are asset-backed, Sankar elaborated on the risks of the instrument.