Context
At the Kautilya Economic Conclave 2025, Finance Minister Nirmala Sitharaman highlighted that innovations like stablecoins and other digital currencies are reshaping global monetary systems, compelling nations to adapt or risk exclusion from emerging financial architectures.
Key Highlights
- Stablecoins Defined:
Cryptocurrencies designed to maintain a stable value by being pegged to an asset such as fiat currencies (e.g., USD, INR), commodities (e.g., gold), or a basket of assets. - Minister’s Observation:
Sitharaman emphasized that:- Stablecoins are transforming money and capital flows globally.
- Nations must “prepare to engage” with them—resistance or isolation could lead to economic marginalization.
- Systemic transformations in the global financial order are inevitable, and no country can remain insulated.
- India’s Policy Position:
- India currently taxes crypto transactions but has not legalized private cryptocurrencies.
- The RBI has consistently opposed private crypto assets, citing financial stability concerns and risk of illicit use.
- Simultaneously, India is experimenting with its own Central Bank Digital Currency (CBDC), a state-backed digital rupee with legal tender status.
- Geopolitical & Economic Note:
- Sitharaman linked the discussion to “wars and strategic rivalries”, suggesting that digital finance could become a tool in global economic leverage.
- India’s capacity to absorb external shocks remains strong, reinforcing its readiness to adapt to digital economic shifts.