Finance Minister Nirmala Sitharaman has sparked renewed discussions regarding India’s stance on digital currencies by emphasizing the necessity for countries to “prepare to engage” with stablecoins. This commentary came during a dialogue at the Global Fintech Festival 2025, featuring Amrish Rau, CEO of Pine Labs, and Sahil Kini, CEO of the Reserve Bank Innovation Hub (RBIH).
Rau highlighted the transformative potential of programmable digital currencies, suggesting that they could significantly improve transaction efficiency by tagging money for specific uses, such as healthcare, food, or fuel payments. He introduced the concept of “colored rupees,” which would restrict spending to designated purposes, thereby enhancing transparency and curtailing the misuse of funds.
In response, Kini acknowledged the advantages of programmability but pointed out that India’s Central Bank Digital Currency (CBDC) already embodies this feature. He elaborated on the Reserve Bank of India’s (RBI) initiative to pilot payments that are purpose-driven, such as digital subsidies specifically allocated for targeted schemes or trade finance.
However, Kini raised important concerns regarding the adoption of stablecoins, cautioning that they could undermine central banks by moving currency issuance beyond governmental oversight. “Issuing currency is the core function of a central bank,” he stated, emphasizing the need for careful consideration by regulators.
Both executives recognized that India’s fintech ecosystem—underpinned by platforms like the Unified Payments Interface (UPI) and account aggregators—offers a robust platform for the future of programmable money, be it in the form of a CBDC or a regulated stablecoin environment. Despite this, they argued that stablecoins might not hold significant benefits for a country boasting one of the fastest, most cost-effective, and highly interoperable payment systems globally.
Kini pointed out the achievements of India’s payment infrastructure, claiming, “We already have real-time payments, instant settlement, and nationwide interoperability through UPI. What exactly do stablecoins add that’s worth the monetary risk?”
In a broader perspective, Standard Chartered’s recent report highlighted that up to $1 trillion might potentially shift from emerging market banks into stablecoins within the next three years. During her address at the Kautilya Economic Conclave, Sitharaman remarked on the fast-evolving nature of money and capital flows resulting from innovations like stablecoins, warning that countries may face binary choices: either adapt to these new monetary frameworks or risk exclusion from the global financial ecosystem.
