Reserve Bank of India (RBI) Governor Sanjay Malhotra has called on central banks worldwide to adopt Central Bank Digital Currencies (CBDCs) as a preferred alternative to stablecoins, arguing that they offer similar efficiency while preserving monetary stability. Speaking during the annual World Bank and International Monetary Fund (IMF) meetings in Washington, DC, Malhotra said that for CBDCs to reach their full potential in global payments, multiple countries must move toward coordinated implementation.
In a conversation with Krishna Srinivasan, Director of the IMF’s Asia and Pacific Department, Malhotra emphasized that CBDCs, being government-backed, ensure the “singleness and integrity of money,” unlike privately issued stablecoins. He noted that while stablecoins mimic fiat in functionality, they often pose risks to monetary policy and financial integrity due to their private issuance and lack of uniform oversight. “Unless other countries also adopt CBDC, we are not going to see the benefits of CBDC insofar as cross-border payments are concerned,” he said, urging collective adoption by global central banks.
Malhotra explained that India’s existing payment systems are already efficient for domestic use, meaning CBDCs would be more relevant for international transactions. “For India, domestic payments are not an issue. We do not need a CBDC or stablecoin for local payments,” he stated. The RBI’s ongoing pilot programs for both retail and wholesale CBDCs are, therefore, designed to explore their role in enhancing cross-border settlement efficiency and reducing reliance on the U.S. dollar.
While acknowledging the innovations brought by cryptocurrencies and stablecoins in asset tokenization, Malhotra argued that they cannot serve as the foundation of national monetary systems. He warned that crypto assets introduce serious challenges related to capital control, monetary policy management, and potential money laundering risks. “In India, it is the CBDC and not crypto,” he affirmed, underscoring the government’s preference for a state-backed digital currency model.
His remarks come amid a subtle shift in India’s approach to digital assets. Earlier this month, Finance Minister Nirmala Sitharaman said during the Kautilya Economic Conclave that technologies such as stablecoins were reshaping global capital flows and financial systems. She urged policymakers to engage proactively with these transformations, signalling the government’s awareness of their growing influence despite its cautious stance.
Addressing currency stability, Malhotra reiterated that the RBI does not target a specific rupee exchange rate but intervenes only to prevent excessive volatility. Recent data showed that the central bank acted to support the rupee, keeping it from slipping beyond its record low of 88.80 amid geopolitical pressures and U.S. tariff concerns.
Looking forward, Malhotra described India’s economic outlook as “phenomenal,” noting that growth could exceed the RBI’s 6.8% forecast for 2025–26 if external trade conditions improve. He concluded by reaffirming India’s commitment to advancing CBDC development and encouraging global collaboration to ensure a more transparent, stable, and interconnected financial future.
