Zerodha co-founder Nikhil Kamath has started a new debate in India’s crypto and fintech communities by questioning the long-term effects of dollar-backed stablecoins on the country’s financial system.
In a recent LinkedIn post, Kamath said India should look past US dollar-linked digital assets and consider creating a gold-backed stablecoin that fits with the country’s traditional savings habits.
Kamath praised India’s Unified Payments Interface (UPI), calling it a major success that helped the country avoid relying too much on foreign-controlled payment systems.
He also credited Indian regulators and the Modi government for being careful with dollar-backed stablecoins, even as global interest in them grows.
Kamath believes that if emerging economies widely use dollar-pegged digital currencies, it could make the US dollar even more dominant and reduce their monetary independence.
While stablecoins are being used more around the world for faster payments, he thinks India should look closely at the long-term effects before fully adopting them.
Kamath suggested a gold-linked stablecoin could help unlock value from the large amount of gold held by Indian households. India is one of the world’s biggest holders of household gold, much of which sits unused in homes and lockers.
He said blockchain technology could help turn these holdings into tokenised gold-backed digital assets.
Kamath’s comments come as India remains cautious about private cryptocurrencies but continues to grow its own digital public infrastructure, such as UPI and the RBI’s digital rupee pilot.
His remarks add to the ongoing debate about whether India’s digital economy should use sovereign digital currencies, dollar-backed stablecoins, or other asset-backed blockchain models like gold.
The world still runs on the dollar.
But countries are quietly hedging out: buying gold, trading in non-USD pairs, building payment rails outside SWIFT.
UPI has been incredible for India to say the least.
To friends championing dollar-backed stablecoins, specifically… pic.twitter.com/WTj0websVS
— Nikhil Kamath (@nikhilkamathcio) May 11, 2026
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