US Legal Backing for Stablecoin Starts Debate in India

Supporters say crypto can be used for purposes as varied as managing govt subsidies and trade settlements

- AJINKYA KAWALE

US President Donald Trump last week signed a law to create a regulatory regime for dollar-pegged cryptocurrencies known as stablecoins, cheering supporters of such digital assets and prompting a debate in India.

Stablecoins are designed to maintain a stable value by being pegged to a fiat currency like the US dollar or other assets, in contrast to the volatility seen in other cryptocurrencies. Tether and USD Coin, the most popular stablecoins, are backed by the US dollar in a 1:1 ratio. That means each stablecoin is intended to be backed by one US dollar in value.

"Stablecoin promises instant txn (transaction), zero chargeback risks, immediate reconciliations and hence low cost in money movement. The value capture is now moving to storing money/currency, leverage and programmability of money...," said Amrish Rau, chief executive officer (CEO) of Indian fintech major Pine Labs, on X.