Keep the stable door closed

For emerging economies like India, the risks of stablecoins are magnified

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RESERVE BANK OF India (RBI) Deputy Governor T Rabi Sankar's scepticism about stablecoins deserves far more attention-and respect-than it has received in crypto-enthusiast circles. At a time when digital assets are being aggressively marketed as efficient, modern substitutes for money, the RBI's warning cuts through the hype to confront a basic but uncomfortable truth: privately issued stablecoins pose serious risks to monetary sovereignty, financial stability, and consumer protection. Stablecoins are often sold as harmless instrumentscrypto tokens neatly pegged to fiat currencies such as the US dollar, promising the best of both worlds: stability without state control. In reality, they represent a quiet but profound challenge to central banks. If widely adopted, stablecoins could displace sovereign currencies in payments, savings, and cross-border transfers, effectively allowing private issuers-often offshore and lightly regulated-to perform core monetary functions. That is not innovation; it is the privatisation of money.