In December, the Reserve Bank of India said that the rise of digital currencies could lead to a global fiasco. They recalled that these instruments are not backed by any safeguards and are used mainly for speculative or illegal activities.
On June 28, the central bank published an article outlining the threats posed by stablecoins. According to them, digital currencies backed by fiat money weaken the appeal of cash and could be dangerous to financial stability.
The report states that criminal groups are inclined to use stablecoins because they are not amenable to regulatory scrutiny.
Central bank digital currencies (CBDC) are the most suitable replacement for such tokens. They are issued by financial authorities that have the ability to control the flow of digital money, Reserve Bank of India analysts stressed.