Why India Needs an INR Stablecoin: Industry Leaders Say Rupee-Backed Digital Assets Could Reduce Currency Risk, Lower Remittance Costs, and Strengthen Crypto Adoption
India has emerged as one of the fastest growing cryptocurrency markets. Despite this, the majority of traders still prefer dollar-pegged stablecoins like USDT and USDC. The industry leaders now think that the next step of growth will require a regulated stablecoin that is backed by the Indian rupee.
SB Sekar, the Head of APAC (Asia Pacific) at Binance, explains that an INR-backed stablecoin would help the Indian market minimize the reliance on foreign currency-denominated digital assets and hedge against exchange rate volatility.
He said, “Having Indian rupee stablecoins will be critical because it allows users and institutions in India to reduce the exposure they have from a foreign exchange perspective.”
Lower Currency Risk and Faster Payments
Stablecoins that are backed by the dollar are the most liquid and accepted coins in the global crypto markets, and have been especially popular among exchanges. However, for Indian investors whose income and expenditure are mostly in rupees, USD/INR rate fluctuations remain a risk.
A regulated INR stablecoin could be used to conduct blockchain-based payments, business settlements and cross-border transactions without having to convert funds to USD, as per the industry experts.
Supporters believe this would cut down on foreign exchange expenses and make digital transactions quicker and more efficient.
Remittance Costs Could Fall Significantly
CoinDCX’s Executive Chairman Sumit Gupta has also spoken about an INR-backed stablecoin, which can have a significant influence on the Indian remittance market.
India takes in over $125 billion in annual remittances, and the traditional forms of remittance still involve a lot of intermediaries and a certain amount of high transaction costs, Gupta said.
He said, “I personally believe that India should embrace stablecoins! India receives over $125B in remittances annually, and stablecoins can reduce costs from 6-7% to just 1-3%, saving us billions in fees.”
This improved settlement process may help reduce costs and speed up transactions for those sending money home as well as those doing cross-border business.
Also Read: Stablecoin Market Cap Records Biggest Monthly Decline in Four Years
Regulatory Questions Remain
Although the industry has been supportive, India has not made any announcements regarding introducing a stablecoin backed by the rupee. The RBI has been very careful about the use of privately issued stablecoins and has been emphasizing developing the Digital Rupee (CBDC).
RBI Deputy Governor T. Rabi Sankar stated that “CBDCs are inherently superior to stablecoins.” He has also presented an argument that cryptocurrencies have no value and can be a threat to financial stability.
As India’s long-term policies for crypto are being considered, industry experts think that a regulated INR-backed stablecoin could potentially support the country’s booming digital payments ecosystem and contribute to India’s overall success in the global crypto economy.
Disclaimer : Crypto News India does not recommend that any cryptocurrency should be bought, sold, or held by you. Do conduct your own due diligence and consult your financial advisor before making any investment decisions.
