In order to improve international payments, Reserve Bank of India (RBI) Governor Sanjay Malhotra advised other central banks to adopt and promote Central Bank Digital Currencies (CBDCs) rather than stablecoins on Wednesday. Malhotra also reaffirmed the Indian central bank’s position on cryptocurrencies while speaking at the World Bank Group and International Monetary Fund (IMF) annual meeting in Washington, DC. He claimed that the use of cryptocurrencies has consequences for money laundering, capital account flows, and monetary policy.
“We won’t experience the advantages of CBDC in terms of cross-border payments unless other nations also embrace it. Therefore, in an interview with Krishna Srinivasan, the Director of the IMF’s Asia and Pacific Department, Malhotra urged everyone in attendance from central banks and other countries that we should promote the CBDC since it has significant advantages over stablecoins.
Days prior to Malhotra’s remarks, Finance Minister Nirmala Sitharaman appeared to allude to a change in the government’s position toward stablecoins. Sitharaman had stated earlier this month at the Kautilya Economic Conclave that innovations like stablecoins were changing the way money and capital movements occurred and that nations were being forced to decide whether to accept new monetary architectures or risk exclusion.
The Guiding and Establishing National Innovation for US Stablecoins Act (GENIUS Act) was passed by the US Senate in June, while the Digital Asset Basic Act bill was presented to the National Assembly of South Korea. Domestic companies may create their own stablecoins based on the South Korean won under this measure. The Legislative Council of Hong Kong passed stablecoin legislation in May, establishing a licensing system for regional issuers of “fiat-referenced stablecoins.”
The RBI has already issued warnings against the risks associated with growing acceptance of private cryptocurrencies linked to the US dollar, which could lead to the dollarization of the Indian economy—a process in which the US dollar starts to replace the rupee and gains traction in the nation. Due to the government’s and the RBI’s inability to regulate the US dollar’s supply, domestic policies may not have the desired effect.
Governor Malhotra commented on the performance of the Indian economy, describing growth as “phenomenal.” He continued by saying that, should the US tariff problem be resolved, there were upside risks to the RBI’s growth prediction of 6.8% for the current fiscal year.
In fact, we have included the higher tariffs as the baseline in our predictions. However, talks are underway. There is a team here (to negotiate) even now. I therefore had breakfast with the team in the morning. They are conversing with US authorities over here.
The World Bank and IMF both increased their GDP growth projections for India for the current year, which ends in March 2026, by 20 basis points (bps) this month to 6.5–6.6 percent. This is due to India’s higher-than-expected growth rate of 7.8 percent in the April–June quarter. However, there are threats to the growth of the following year due to the United States imposing a 50% overall tax on Indian imports. As a result, the two international organizations also reduced their projections for India’s growth in the upcoming year by 20 basis points, to 6.2% to 6.3%.
