Massive Potential for Cryptocurrencies in India: CoinDCX CEO Urges Immediate Web3 Initiatives Worth Over a Trillion Dollars
India is poised to release a discussion paper on stablecoins by July 2025, marking a significant moment for the country's crypto industry and economy. The paper, led by the Department of Economic Affairs, aims to stimulate consultations among ministries, regulators, industry, and the public, with a focus on stablecoins - digital assets designed to maintain a stable value by being pegged to real assets like cash, gold, or fiat currencies.
While the Reserve Bank of India (RBI) remains cautious about stablecoins, citing risks to consumers and concerns about foreign-linked digital currencies, the Securities and Exchange Board of India (SEBI) appears more open to a segmented regulatory approach. This approach would see different regulators oversee various aspects of the crypto market.
Cryptocurrencies are not legal tender in India, and their use for everyday payments is not permitted. The RBI promotes its own Central Bank Digital Currency (CBDC), the Digital Rupee, as a safer alternative for payments. If India adopts a regulatory framework for stablecoins, it could unlock significant efficiency gains, especially in cross-border remittances and B2B payments.
Regulatory uncertainty, however, remains a challenge. The RBI’s skepticism and the absence of clear guidelines could hinder innovation and investment in India’s crypto sector. In contrast, countries like the U.S. and those in the EU are advancing comprehensive stablecoin regulations, which could make those markets more attractive for crypto businesses and talent.
The integration of stablecoins into India’s financial system could enhance economic efficiency by lowering transaction costs, especially for remittances and international trade. Faster, cheaper, and more transparent cross-border payments could benefit both businesses and consumers, potentially increasing disposable income and stimulating economic activity. However, unregulated or poorly regulated stablecoins could expose consumers to fraud, volatility, or systemic risks.
If India’s regulatory framework for stablecoins and crypto remains slow, fragmented, or overly restrictive, there is a real risk of brain drain - talented developers, entrepreneurs, and companies may relocate to jurisdictions with clearer, more supportive regulations. The U.S., EU, Singapore, and UAE have all introduced or expanded regulatory frameworks that provide certainty and foster innovation in digital assets.
India's crypto ecosystem is at a crossroads with the world powers, including the U.S., doubling down on regulated stablecoins. The U.S. Treasury Secretary, Scott Bessent, describes the GENIUS Act as a national economic strategy. Stablecoins, digital currencies pegged to fiat, are seen as a potential catalyst for India's economic growth. India ranks first globally in grassroots crypto adoption but lacks formal infrastructure for stablecoins.
Sumit Gupta, CEO of CoinDCX, endorses the BJP's pro-stablecoin stance, believing that the Web3 ecosystem could add $1 trillion to India's GDP by 2032. Stablecoins can solve several issues in India, such as instant, low-fee cross-border payments, tokenized savings products, digitally native bonds, and rural and small-business lending. Regulated stablecoins would give users a legally compliant entry point into Web3, without the volatility of traditional crypto assets.
Bhandari argues that rupee-backed stablecoins issued under a sovereign, transparent framework can address RBI's concerns. The forthcoming discussion paper on stablecoins marks a pivotal moment for India's crypto industry and broader economy. Clear, balanced regulation could unlock efficiency gains in remittances and payments, fueling economic growth. However, regulatory hesitation or fragmentation risks driving talent and investment overseas, underscoring the need for timely, coherent policy that balances innovation with consumer protection.
- The discussion paper on stablecoins, scheduled for release by July 2025, aims to encourage comprehensive consultations within India's ministries, regulators, industry, and public.
- The Securities and Exchange Board of India (SEBI) favors a segmented regulatory approach, where different regulators oversee various aspects of the crypto market.
- Due to the absence of clear stablecoin regulations, India's crypto sector may experience hindered innovation and investment.
- Stablecoins, digital assets pegged to real assets like cash or fiat currencies, could unlock significant efficiency gains, especially in cross-border remittances and B2B payments.
- If India adopts a slow, fragmented, or overly restrictive regulatory framework for stablecoins and crypto, talented developers, entrepreneurs, and companies may consider relocating to jurisdictions with clearer, more supportive regulations.
- Sumit Gupta, CEO of CoinDCX, supports the pro-stablecoin stance of the BJP, believing that the Web3 ecosystem could contribute $1 trillion to India's GDP by 2032.
- Bhandari suggests that rupee-backed stablecoins, issued under a sovereign, transparent framework, could address the Reserve Bank of India's (RBI) concerns about stablecoins, potentially fueling economic growth.
