India wants its own stablecoin?

In today’s episode on 12th November 2025, we tell you why India is now rooting for its own stablecoin. Limited seats for Insurance Webinar by Ditto 👉🏽 Click here to register while seats last.

• 0:00Speaker 00

  Hello folks, you're tuned in to Finshots Daily. In today's episode, we tell you why India is now rooting for its own stablecoin.

• 0:11Speaker 00

  But folks, here's a quick side note from team Ditto. Insurance just got cheaper. Since the government removed the 18% GST on insurance premiums, life and health policy is now costless. But cheaper does not always mean simpler. That's why we're conducting a two-day insurance masterclass, where we'll help you understand what to buy, how much cover you need, and how to avoid common mistakes. Only few seats remaining. Click the link in the description to save your spot. Now, back to the story. India and the crypto world are like frenemies. The government, the central bank, and the regulators have made it pretty clear that they're not exactly crypto's biggest fans. Yet, they don't want to see the space spiral out of control either.

• 0:55Speaker 00

  So, they keep it on a tight leash with hefty taxes and strict rules. But, in a sudden plot twist, Polygon, one of the biggest names in the blockchain world, and Ankh, a homegrown fintech startup, have joined hands to build what could be India's very own stablecoin. They're calling it the Asset Reserve Certificate, or ARC, at least for now. That naturally makes you ask, if Indian regulators have always kept crypto at arm's length, why the sudden warmth toward something like a stablecoin? Well, first things first, India's relationship with the crypto world is something it might not want to build, but is forced to. Given everything happening in this space, and stablecoins are one such a relationship.

• 1:40Speaker 00

  To understand why, you'll first need a quick refresher on what stablecoins are. But if you already know what they are, you can skip ahead. So, imagine now that you're really eager to invest in a cryptocurrency. Let's just assume it's Bitcoin. Bitcoin is basically a decentralized digital currency, meaning no regulator or government controls it. It's a limited pool of digital coins that need to be mined by miners who solve complex mathematical puzzles to validate and record transactions on the Bitcoin blockchain.

• 2:12Speaker 00

  If that sounded complicated, you can understand it in depth in a series that we did. I'll link it in the description. Or just think of it this way. Bitcoin isn't just a currency. It's a network that allows people to transfer values securely without relying on bank or government. However, bitcoin prices are highly volatile because they depend purely on market demand and speculation. It can surge today and crash tomorrow, which means if you use bitcoin for everyday transactions like buying groceries, a kilo of potatoes could cost thirty rupees today, three hundred rupees tomorrow and twenty rupees the next. That's impractical. And that's exactly why the crypto world came up with something else. Stable coins. These are digital tokens that keep all the benefits of crypto,

• 2:56Speaker 00

  like fast, cost-effective transfers and blockchain-based transparency, but are far more stable in value. Stable coins get their value by tying or pegging themselves to something steady like a government currency, say the rupee or US dollar or even commodity like gold. Take USDT Tether, for instance. One USDT is meant to always equal one US dollar. It works on a simple premise that for every one USDT issued, the company behind it, that is Tether, keeps one dollar in reserve, either in cash or in safe assets like US Treasury bills. So if you give them a hundred dollars, you get hundred USDT. Return those hundred USDT, you get a hundred dollars back.

• 3:41Speaker 00

  That's how the price stays stable because it's backed by real money. It's also a great way to transfer money across borders without a traditional intermediary like a bank. It's faster and cheaper. That's why a growing share of remittances from Indians working abroad as well as Indian traders operating overseas are now moving to stable coins. But here's the thing. The global stablecoin market is worth about two hundred and fifty billion dollars and over ninety-eight percent of it is dollar-based. Two coins, USDT and USDC, which is issued by Circle, dominate this space simply because the US dollar is the world's preferred reserve currency. And these coins are backed by US government securities, which are among the safest assets out there.

• 4:25Speaker 00

  But again, over eighty percent of stablecoin transactions happen outside the US and a big chunk of that comes from, wait for it, India. Yes, unofficial estimates say that India has over three hundred and fourteen million stablecoin users, the most in the world. Plus, nearly sixty percent of Indians' foreign exchange conversions are now into stablecoins. And that's not just because they're cheap, but also because of something we didn't tell you earlier, the sweet lure of arbitrage. See, despite being pegged to something like the dollar, stablecoins are freely tradable on crypto exchanges.

• 5:03Speaker 00

  Their price can move slightly based on market demand and supply, but not by much, because remember, the back buy real assets. The stability also comes from what happens when the value of one stablecoin goes above one dollar, say one point oh five dollars. That means people are paying too much for it. So traders step in and think, wait, I can make a profit here. They buy new stablecoins directly from the issuing company at one dollar, then sell them on exchanges for one point oh five dollars. That way, they make five cents per coin, and when more traders do this, supply increases and the price naturally falls back to one dollar.

• 5:43Speaker 00

  Now, because of these trade mechanics, USDT normally trades at a four to five percent premium in India. It's simply because Indian rules make it tricky to directly deposit or withdraw rupees from crypto exchanges through banks, which means less USDT comes into India through legal channels. So when a lot of people want to buy USDT but only a small supply is available, prices go up. And during this time, when you want to send money home from abroad, if one dollar is equal to eighty-eight rupees officially, USDT might sell for ninety-one to ninety-two rupees here, which means the folks back in India receive more rupees. This is one reason people love using stablecoins.

• 6:23Speaker 00

  But since, as we said, most of them are dollar-backed, it means the money essentially flows out of India and strengthens the dollar system more than the rupee system. And that's exactly what Polygon and Anq want to change. Their plan is to keep the value tied to India's own government-backed assets, specifically government securities and treasury bills, also known as ST bills. That way, they hit two birds with one stone. Indian money stays within the country, boosting liquidity and strengthening India's government securities market. But that's not the only reason behind this move. Across Asia, countries are building their own currency-backed stablecoins. Just recently, Japan launched a pilot for yen-backed stablecoins to reduce its dependence on dollar-based ones.

• 7:07Speaker 00

  India probably feels the need to do the same because staying on the sidelines could mean falling behind. Still, there's a catch. Dollar-backed stablecoins have already earned a reputation for being safer and easier to trade. So even if India rolls out its own version, how quickly demand will pick up is anyone's guess. Then, there's still the regulatory grey area around digital assets. If India greenlights stablecoins, private companies might start issuing their own versions, creating parallel payment systems outside traditional banking rails. This has been tried before, but most of those efforts and stablecoin projects fizzled out due to a lack of clear reserve backing, uncertain redemption guarantees, and more importantly, the absence of a defined regulatory framework.

• 7:52Speaker 00

  But if these guardrails eventually come into place and stablecoins gain wider adoption, there's a risk they could start challenging the government's control over the monetary system and financial stability. In fact, China faced something similar recently. Regulator there stopped firms like Ant Group and JD.com from launching stablecoins even after passing a new law to regulate them. India could take a cue from that. Before unlocking the full potential of ARC or any rupee-backed stablecoin, it'll need clear rules around the broader crypto ecosystem. Because without that, the promise of innovation may just hit a policy roadblock. Feels like we're stuck in some kind of loop now, right? I'll see you guys in the next one.

• 8:36Speaker 00

  Thank you for listening to today's episode. And if you want to share your feedback or suggestions, do drop us an email to [email protected]. Until next time.