Rupee-backed stablecoins could complement RBI’s digital currency

The past decade has witnessed the astronomical rise of crypto assets around the world. Rupee-backed stablecoins would complement the Reserve Bank of India’s Central Bank Digital Currency, namely the e-rupee that is being tested out. However, the combination of rupee-backed stablecoins and the e-rupee could aid in the creation of an egalitarian and free digital finance ecosystem in India. As per a Bank for International Settlements study, the use of digital currencies in payments can cut transaction costs by as much as 40-50%, making rupee-backed stablecoins a valuable tool for businesses and individuals alike. While India’s central bank may want its e-rupee to serve all the functions of a digital currency, the country could also consider encouraging the use of rupee-linked stablecoins for domestic and international transactions.