Former RBI executive director G Padmanabhan on Monday urged the Indian government to take a clear stance on stablecoins, warning that leaving the issue in limbo could repeat the uncertainty seen with cryptocurrencies.
Speaking at a prelude event for the Global Fintech Festival 2025, Padmanabhan, now an advisor to the Payments Council of India, said, “Stablecoin is quite a different proposition from crypto, and India as part of the global ecosystem has to take a view one way or the other very quickly.”
He suggested that detailed discussions on stablecoin regulation should happen in closed-door meetings with regulators, emphasizing the need for coordination with global developments. Padmanabhan pointed out that India cannot ignore how other countries are moving forward, especially after the US advanced its e-currency framework.
Government’s Partial Approach to Crypto
While the government considers stablecoins separately, it remains cautious about cryptocurrencies. A recent government document seen by Reuters indicates that India does not plan to create a full legal framework for crypto. Instead, authorities are opting for partial oversight, citing risks to the financial system if crypto becomes fully mainstream.
The document says that “regulating cryptocurrencies would effectively give them legitimacy,” which could bring bigger risks to the financial system. But it also admits that banning crypto completely isn’t realistic, since peer-to-peer transfers and trades on decentralized platforms will keep happening.
Padmanabhan’s warning shows why India can’t wait for stablecoins. Clear rules will help India push digital payments forward, keep the financial system safe, and stay in step with the rest of the world.
Also Read: Mudrex Survey: 93% of Indian Investors Support Crypto Regulation
