E-Paper
It’s Time to Kick-start Stablecoin Pilots alongside RBI’s CBDC
Ahead of the Union Budget, India’s crypto debate resurfaces, moving beyond the outdated ban-vs-innovation binary.
As the Union Budget approaches, discussions around digital assets in India are once again gaining momentum. Much of this debate continues to centre on whether crypto access should be permitted at all, often framed as a binary choice between allowing innovation and protecting vulnerable investors. This framing is increasingly outdated.
India does not need a broad ideological debate on crypto. In order to align with the global adoption and implementation rate of crypto, it needs a narrow, outcomes-driven intervention focused on remittances. India is the world’s largest recipient of remittances. In 2024, inflows touched a record $135.46 billion, more than doubling in eight years. This reflects the scale of India’s global workforce and the central role remittances play in household incomes and the broader economy. The global average cost of sending money across borders remains close to 6 percent. Applied to India’s remittance inflows, this implies that nearly $8 billion is lost every year to fees, foreign exchange spreads and intermediary costs. That is value that could otherwise flow directly to Indian families and into domestic consumption and savings.
Traditional remittance systems depend on multiple correspondent banks, clearing institutions and settlement windows. This architecture was built for a different era. Today, it results in high costs, limited transparency and settlement delays that can stretch into days, even for routine transfers. This solution to the problem is not theoretical. The technology to solve it already exists.
Cryptocurrencies, and more specifically stablecoins, offer a credible alternative for cross-border remittances when deployed in a narrow, regulated manner. Not as a replacement for domestic money. Not as a substitute for the rupee. Not as a competitor to the RBI’s CBDC. But as a purpose-built tool to reduce friction in international money movement.
Stablecoin-based remittances work differently. A sender converts local currency into a permitted stable digital settlement asset through a regulated platform. That value moves across a blockchain network in minutes, operating round the clock without cut-off times or holidays. The recipient converts it into rupees through authorised on-ramps, with funds landing directly into a bank account. India is particularly well positioned to adopt this model. Thanks to the JAM trinity of Jan Dhan accounts, Aadhaar and widespread mobile access, last-mile banking penetration is already near-universal. In India, access is largely solved. Cost and efficiency are not.
Comparisons between CBDCs and stablecoins are unhelpful. They are designed to solve different problems and can coexist without conflict when their roles are clearly defined. In fact, a clear Budget signal can unlock this opportunity. The Union Budget should announce the launch of an RBI-led regulatory sandbox for cross-border remittances. The mandate should be explicit. Test whether costs can be reduced, settlement times shortened and compliance maintained at scale.
By removing layers of intermediaries, remittance costs will fall sharply. Settlement will become near instant. Transparency improves because transactions are traceable end to end on an immutable ledger. Compliance can be embedded directly into the flow rather than bolted on after the fact. Concerns around volatility, often associated with crypto assets, are addressed through stablecoins designed to maintain value during transit. Properly structured and regulated, such instruments can preserve purchasing power without encouraging speculation. The objective is not to introduce foreign currency substitutes into the domestic system, but to modernise the rails that carry cross-border value.
This is where the policy conversation needs to shift. India has successfully used regulatory sandboxes before, from UPI to fintech innovation. Remittances deserve the same pragmatic approach. Even a partial improvement in efficiency could redirect billions of dollars annually from intermediaries to Indian households, with no fiscal burden on the exchequer.
By Nischal Shetty, Founder, WazirX
Disclaimer: Readers are advised that Crypto products and NFTs are unregulated and involve significant risks. There may be no regulatory recourse for losses arising from such transactions. This article is part of paid consumer connect initiative and is independently created by the brand. Hindustan Times/HTDSL shall not, in any manner, be responsible or liable for the content of the article, advertisement, including the views, opinions, announcements, declarations, or affirmations expressed therein and is absolved from any legal action or enforceable claims. This content is for informational and awareness purposes only and does not constitute financial advice.
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