Stablecoins An ‘Existential Threat’
Stablecoins are an existential threat to policy sovereignty and are only useful to a few countries, said Reserve Bank of India Deputy Governor Rabi Sankar at an event, according to the local news platform The Hindu.
Central bank digital currencies (CBDC) are considered better stable solutions for every country, according to Sankar. Stablecoins benefit economies like the U.S. and Europe, but could potentially replace the rupee in India due to the government’s profit transfer from issuing currency to private players.
“If large stablecoins are linked to some other currency, there is a risk of dollarization,” Sankar reportedly said, expressing concerns about the potential impact of stablecoins on India’s capital regulations or monetary policy. “We have to be very careful about allowing these sorts of instruments… From the past experience in other countries, it is an existential threat to policy sovereignty.”
(With inputs from Shikha Singh)
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