Paper: GS – III, Subject: Indian Economy, Topic: Banking and Financial Intermediaries, Issue: Stablecoin: India’s Digital Evolution of Finance.
Context:
India is leading the global digital finance revolution, with PM Modi’s fintech vision and strong DPI like UPI. Stablecoins mark the next phase, merging innovation, trust, and regulatory oversight.
Key Highlights:
What are Stablecoins?
- They aim to minimize price volatility, making them suitable for transactions and as a store of value within the volatile cryptocurrency market.
India’s Cryptocurrency Policy:
- Reservations about Private Cryptocurrencies: Both the Finance Ministry and the Reserve Bank of India (RBI) have expressed concerns about private cryptocurrencies (virtual digital assets).
- Central Bank Digital Currency (CBDC): Simultaneously, the RBI is piloting its own Central Bank Digital Currency (CBDC), which has legal backing as official currency.
From Remittances to a Tokenized Economy:
- Tokenized Assets: Home loans, MSME financing, or trade invoices can be issued as programmable tokens, automating repayments, interest adjustments, and lien releases.
- Traceability and Transparency: Mudra or SIDBI loans could be tokenized to ensure end-use traceability, while carbon credits under the Green Credit Programme could attract verified ESG investment.
- Digitized Compliance: Tokenization would digitize compliance, lower transaction costs, and create transparent and audit-ready data trails for policymakers and investors
The Role of Stablecoins in India’s Digital Finance Ecosystem:
Stablecoins can make India a global leader in digital finance by combining blockchain efficiency with regulation, enabling secure payments, tokenized assets, and inclusive, sovereign-backed digital growth.
La Excellence IAS Academy, the best IAS coaching in Hyderabad, known for delivering quality content and conceptual clarity for UPSC 2025 preparation.
FOLLOW US ON:
◉ YouTube : https://www.youtube.com/@CivilsPrepTeam
◉ Facebook: https://www.facebook.com/LaExcellenceIAS
◉ Instagram: https://www.instagram.com/laexcellenceiasacademy/
GET IN TOUCH:
Contact us at info@laex.in, https://laex.in/contact-us/
or Call us @ +91 9052 29 2929, +91 9052 99 2929, +91 9154 24 2140
OUR BRANCHES:
Head Office: H No: 1-10-225A, Beside AEVA Fertility Center, Ashok Nagar Extension, VV Giri Nagar, Ashok Nagar, Hyderabad, 500020
Madhapur: Flat no: 301, survey no 58-60, Guttala begumpet Madhapur metro pillar: 1524, Rangareddy Hyderabad, Telangana 500081
Bangalore: Plot No: 99, 2nd floor, 80 Feet Road, Beside Poorvika Mobiles, Chandra Layout, Attiguppe, Near Vijaya Nagara, Bengaluru, 560040
