Indian crypto investors are taking a keen interest in stablecoins which accounted for over 25 per cent of spot trading volume on crypto platforms like Coinswitch in the first four months of calendar 2025.

Stablecoins offer a relatively stable entry and exit point in crypto markets for users, pegged to real-world assets like the US dollar, euro, or gold and offer price stability that is ideal for serious financial use cases.

Stablecoin usage in India is expected to reached 70 per cent in 2025, as per a Crypto Dollarisation report. It noted how 57 per cent of Indian crypto users showed a “very favourable” response to stablecoins, bested only by Nigeria that showed a 75 per cent preference. The report also said that India has converted 58 per cent foreign exchange to a stablecoin. In fact, India ranked eighth in terms of percentage of stablecoin flows, in a recent research report by Fundstrat

“Investors often buy stablecoins at ₹85–86 and sell when prices reach ₹90, locking in profits without the extreme volatility associated with other assets,” Ashish Singhal, co-founder of Coinswitch,told businessline, stressing on stablecoins’ ability to execute arbitrage opportunities between exchanges and carry out derivatives tradingandreduce complexity in managing margin requirements.

The overall stablecoins market reached an all-time high in June 2025 with total market capitalization growing by 1.58 per cent to $251 billion, as per CoinDesk data. It marked the the twenty-first consecutive month of growth for stablecoin market cap.

A global trend

According to Edul Patel, co-founder and CEO of Mudrex, a global crypto investing platform, the trend towardsstablecoins is part of a global trend as seen in February, when stablecoin transfer volumes grew to $4.1 trillion, over 100 per cent year-over-year increase.

Considering stablecoins are known for their potential in cross-border payments, enabling near-instant, low-cost transfers, Patel argued that stablecoins are especially good for India, which receives highest remittances of over $124 billion in the world annually. Stablecoins could save up to $10 billion annually in fees and delays. India also incurs $3–5 billion in fees and facing lengthy settlement delays for the remittances. Stablecoins can cut these costs by up to 90 per cent, said Patel.

Beyond remittances, stablecoins play a crucial role in crypto transactions for retail investors. On most Indian exchanges, rupee is first converted into stablecoins like USDT/USDC before users can buy crypto, effectively making stablecoins the first layer of crypto investing in the country.

The Reserve Bank of India (RBI) is also expected to expand the offline functionality of its retail CBDC (CBDC-R), enabling users to transact with the digital rupee without an internet connection, said CoinDesk. Despite stabelcoins’ role here as well as in bridging the gap between traditional financing and crypto trading, RBI remains cautious of stablecoins. This means there is still no clear licensing framework or sandbox for INR-backed stablecoins.

According to Aishwary Gupta, Global Head of Payments & RWAs, Polygon Labs, this leads start-ups to domicile abroad to experiment. Indian users have to rely on foreign stablecoins like USDT/USDC resulting in loss of regulatory oversight and dependency on foreign banking infrastructure.

“If RBI were to recognise and regulate rupee-backed stablecoins (perhaps issued by licensed banks or fintechs), it would give India control over its digital financial infrastructure and ensure that monetary policies are not bypassed,” said Gupta.

However, Sharat Chandra, Founder of EmpowerEdge Ventures that assists fintech and web3 startups, argued that rupee-backed stable coins is a “futile argument” since the acceptability of Indian currency is very limited in the global market.

“My argument is, if you have a gold-centric approach for the foreseeable future, why not enable gold-backed stable coins that will not pose any challenge to the existing capital control restrictions?, If India pivots to that model, then you can pose an alternative to the dollar-dominant stable coins,” said Chandra, adding that there’s no play for stable coins in India until RBI changes the existing payment and settlement systems act.

The hesitation in India towards crypto is largely due to high price volatility, association with speculative trading and lack of regulatory clarity. Stablecoins, however, function more like a digital representation of fiat currency than a speculative asset. If implemented well, they can support government objectives like financial inclusion, efficient payments, and digitised commerce—without the baggage of volatility.

This also resonates with India’s success with UPI—where the focus was on utility over speculation. Stablecoins can replicate that same ease of use but on global blockchain infrastructure, enabling programmable finance with native rupee tokens, argued Gupta.

Published on June 29, 2025