Shivangi Saxena
Many countries are rapidly adopting crypto-based digital currencies. The popularity of cryptocurrencies is increasing. But Bitcoin and other cryptocurrencies are quite volatile. There are many big fluctuations in its price at times. In such a situation, stablecoin is being seen as a stable and reliable option. In such an environment, there are now indications of India adopting them.
The digital payments and fintech sector is expanding rapidly in India. In such a situation, India does not want to ignore the possibilities of stablecoin. India’s Finance Minister Nirmala Sitharaman said that new digital experiments like stablecoin are changing the system of money and capital transactions. A huge change is taking place in the world and all countries should be prepared for it.
However, the Government of India and the Reserve Bank of India have been cautious and skeptical about cryptocurrencies since the beginning. RBI has many times described cryptocurrencies as a risk to financial stability. This statement of Nirmala Sitharaman has indicated an important change in India’s stance.
Earlier, former Executive Director of RBI G. Padmanabhan had said about the adoption of stablecoin that it is different from other cryptocurrencies. It is being adopted at the global level. He had appealed to the government to soon adopt a clear policy on cryptocurrency.
What is a stablecoin?
Cryptocurrencies such as Bitcoin and Ethereum are considered volatile. There can be sharp fluctuations in their prices. There is a possibility of drastic changes in their prices due to sudden excessive buying or selling, hacking incidents, or large investments. Sometimes their prices can fluctuate by hundreds of dollars. This may pose a risk to investors and users.
In such a situation, stablecoin emerges as a better option. Apart from being a digital currency, it also gives the credibility of traditional currency. The specialty of Stablecoin is that its price remains more stable than other cryptocurrencies. It is designed in such a way that its price does not change much because it is linked to fiat currencies like the dollar and the euro.
For example, the price of a stablecoin is usually kept equal to one dollar or one euro. This means that its value remains stable. Like the official currency or fiat currency of any country.
Experts believe that at present there are two important reasons for increasing acceptance of stablecoin. First is the fall in the value of the dollar and second, the increase in gold prices. In countries where the value of currency is falling rapidly, stablecoin alternatives like Tether and USDC are being created to safeguard their assets.
Stablecoin is a digital currency based on blockchain technology. It can be sent or received anywhere and anytime through the Internet. This method of transaction is fast and transparent. Therefore it is mostly used for international money transfers.
Bolivia had completely banned cryptocurrencies for many years. But it was removed last year. After which the popularity of Stablecoin Tether or USDT has increased there. Tether is a stablecoin pegged to the dollar. The price of this one stablecoin is as much as one dollar at all times.
Japan to recognize stablecoin in year 2022. For this, he passed a bill and prepared a legal framework. Due to the global popularity of stablecoins, India is also moving towards them.
Edul Patel, founder of crypto investment platform MudraX, believes that big countries of the world are now making rules for crypto and stablecoins. Global acceptance has played an important role in this. He told DW that countries like Singapore, UAE, US are adding digital currency to their banks and financial systems. They are also making rules for safety. India is watching this.
Edul Patel says, “Earlier India was cautious about cryptocurrency. It was taking time to think. But now it is becoming more active. Instead of completely rejecting crypto, India is now preparing to adopt it by understanding it, making right rules and with security. India is also making its strategy by looking at the experience and methods of big countries of the world so that the digital economy of the country becomes strong and people can use digital assets safely. “
How big is the stablecoin market?
Recently the market of stablecoin has increased. According to the data of the year 2025, Europe’s share in all stablecoin related transfers taking place worldwide is 34 percent. This means that one-third of the world’s stablecoin transfers are taking place in Europe. Stablecoins like USDT and USDC are popular in Europe.
The stablecoin market remained stable and strong in the year 2024. The total market cap of the top-10 fiat-based stablecoins in the year 2024 was approximately US$161 billion. This is about 8.2 percent of the total value of the crypto market. USDC, USDT and DY had major participation in this.
According to a report by JP Morgan, the value of the US dollar-backed stablecoin market has now reached $225 billion. This accounts for approximately 99 percent of the world’s total stablecoin market. It makes up about 7 percent of the $3 trillion crypto market and is still growing.
Talking about India, there are about 30 crore stablecoin holders here. This number shows that people are beginning to trust stablecoins more than traditional digital payments. Being tied to the dollar, stablecoins are accepted across borders. In such a situation, international transactions become easier. These are also much cheaper than the traditional remittance process offered by Indian banks.
Why is India changing its stance?
India has been negative towards cryptocurrencies since the beginning. Without control, cryptocurrencies can be misused. In 2020, a report by the Financial Action Task Force (FTFA) said that stablecoins could be used for illegal activities such as money laundering and terrorism. It is digital and global. Many times the identity of the sender and receiver remains confidential. Due to which the person committing illegal acts cannot be detected. For this reason India is also maintaining vigilance.
Although cryptocurrency is not completely banned in India. But the rules regarding this are very strict. In America, the Trump government has become active regarding ‘US-backed’ crypto, especially stablecoin. The use of stablecoins is increasing worldwide. At the same time, the demand for dollars is decreasing. Therefore, the Trump government wants to strengthen dollar-linked or dollar-backed stablecoins by bringing them under the ambit of regulations.
Amit Kumar, former co-founder of OG Club Dow, works with the Web-3 and cryptocurrency community in India. He says that America wants to control the digital economy by doing this. He told that this year’s Token-2049 event was also based on this. This is the world’s largest global conference on cryptocurrency and Web-3. Amit tells DW that the focus of the conference was on stablecoins. All countries want stablecoin to be based on their country’s currency or developed blockchain technology.
Amit explains, “Junior Trump also attended this conference and emphasized the importance of stablecoin. Today every country wants to strengthen its economy and does not want to depend on any other country. Currently, most of the things are evaluated on the standard of US dollar. At the same time, India is also working towards strengthening its digital economy and infrastructure. Especially such a system which is supported by the Reserve Bank of India. India is now rupee-backed. “Seriously considering the possibility of stablecoins.” India also wants a strong digital economy for itself. In such a situation, stablecoins can be a step towards a big start.
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