India’s central bank has renewed its call for governments to prioritize central bank digital currencies over privately issued stablecoins, warning that the latter could pose risks to financial stability. In its December financial stability report released on Wednesday, the Reserve Bank of India said CBDCs help preserve the “singleness of money and the integrity of the financial system,” positioning them as the “ultimate settlement asset” and the primary “anchor for trust in money.”

“The RBI, therefore, strongly advocates that countries should prioritise central bank digital currencies over privately issued stablecoins to maintain trust in money, preserve financial stability and design next generation payments infrastructure that is faster, cheaper and secure.”

The report also noted that stablecoins may introduce additional channels for systemic risk, particularly during periods of market stress, making it “vital that jurisdictions carefully assess the attendant risks and determine policy responses appropriate to its financial system.”

The stance comes as India’s government signaled in its Economic Survey 2025–2026 that it is exploring potential regulation for stablecoins, while the RBI continues to urge caution toward crypto-related developments. As the country’s monetary authority, the RBI is expected to have a decisive influence on how digital assets are ultimately treated in India.

CBDCs framed as safer alternative to stablecoins

The debate around CBDCs remains contentious. Critics have raised concerns about privacy implications and the possibility of weakening the traditional banking sector if individuals become direct customers of central banks. Supporters, however, argue that CBDCs could improve payment efficiency and broaden financial inclusion.

In its report, the RBI argued that CBDCs can deliver the same advantages often attributed to stablecoins, such as efficiency, programmability and instant settlement, while retaining the credibility and safety associated with sovereign money. “The RBI maintains a cautious stance on crypto assets, including stablecoins, prioritising sovereign digital infrastructure to safeguard monetary sovereignty amid global shifts and preserve financial stability,” the bank said.

Stablecoin growth contrasts with slow CBDC rollout

Globally, interest in stablecoins continues to rise, with financial institutions across the US, Europe and Asia exploring them for faster and cheaper transfers compared with traditional payment rails. This momentum has driven strong growth in the sector, with stablecoin market capitalization expanding from about $205 billion at the start of 2025 to $307 billion by year-end, according to DefiLlama.

CBDC adoption, by contrast, remains limited. Data from the Atlantic Council shows that only Nigeria, the Bahamas and Jamaica have fully launched CBDCs so far. An additional 49 countries are running pilot programs, 20 are actively developing the technology, and 36 remain in the research phase, underscoring the slower pace of rollout worldwide.

Sources:

https://www.rbi.org.in/Scripts/PublicationReportDetails.aspx?UrlPage=&ID=1308

https://cointelegraph.com/news/india-central-bank-cbdc-vs-stablecoins

https://www.atlanticcouncil.org/cbdctracker/

https://defillama.com/stablecoins