CBDC safer option, stablecoins pose greater risk: RBI

Central bank digital currencies are a far safer option than stablecoins, which pose greater risks than their purported benefits, according to Reserve Bank of India (RBI) deputy governor T. Rabi Sankar.

- Subhana Shaikh

“Do stablecoins serve a purpose? It seems to me that they do not; at any rate, they do not serve a purpose that cannot be served better by fiat money,” Sankar said at the Mint BFSI summit in Mumbai. Stablecoins fail the fundamental tests that define modern money and pose risks far greater than the benefits their proponents claim, he said.

Central bank digital currency (CBDC) is backed by the fiat currency of a country, issued by regulators. Stablecoins are private tokens that are pegged to a currency or another asset.