India is exploring a rupee-linked stablecoin to bolster digital transactions and cross-border remittances, despite scepticism from regulators and warnings from the IMF about potential risks of dollarisation and financial fragmentation.
India’s debate over a rupee-linked stablecoin is sharpening as policymakers weigh whether a privately issued digital token could strengthen the currency’s role in crypto markets without surrendering control to dollar-based rivals. The idea, still unapproved, has drawn attention because it could give Indian users a faster route into digital payments and cross-border transfers while keeping value anchored to the rupee.
The broader discussion has been intensified by the International Monetary Fund, which has been examining how tokenised finance is reshaping money and payments. In recent commentary and working papers, the fund has warned that stablecoins can speed up transactions and widen access to foreign currency, but can also create fragmentation, increase the influence of private issuers and complicate crisis management for regulators.
That is where the rupee token debate becomes more interesting. If an INR stablecoin were issued on the same blockchain networks as dollar-backed coins such as USDT and USDC, users could in theory move more easily between rupees and foreign stablecoins. That would reduce the number of steps needed to swap into dollar tokens and could make them easier to reach through exchanges, liquidity pools and decentralised platforms. But the IMF has also argued that this same channel could accelerate dollarisation if users prefer to hold dollars rather than local currency.
The stakes are especially high in India, which receives more remittances than any other country and where annual inflows are estimated at more than $125 billion. A rupee stablecoin could lower transfer costs, which are often around 1%, compared with the 5% to 7% commonly charged by banks and money-transfer firms. Yet wider use of dollar stablecoins could also pressure the rupee and make it harder for the Reserve Bank of India to track flows that move directly across blockchain networks.
For now, the idea remains speculative. Firms including Polygon and Anq have discussed plans for an INR token called ARC, with a launch target in the first quarter of 2026, but there is no formal government approval. Reserve Bank deputy governor T. Rabi Sankar has been openly sceptical, arguing that cryptocurrencies have no intrinsic value and that a central bank digital currency is a safer option. “CBDCs are inherently superior to stablecoins,” he has said, underscoring that, despite growing interest, the rupee stablecoin is still a proposal rather than a policy choice.
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