The Reserve Bank of India (RBI) has reiterated its long-held anti-crypto stance, warning that cryptocurrencies, including stablecoins, pose significant risks to financial stability. In its Financial Stability Report, the RBI raised concerns about the unchecked use of digital assets, stating that it could loosen monetary control, enable capital flight, and divert resources away from the real economy. The regulator also highlighted the growing systemic risks posed by stablecoins, citing their potential to impact economic stability and their increasing holdings of mainstream financial assets. The RBI has advocated for central bank digital currencies as a more reliable alternative to stablecoins. Additionally, the report expressed concerns about the risks introduced by tokenization, including liquidity mismatches, excessive borrowing, and operational fragilities. This warning comes as India's cryptocurrency sector remains in regulatory uncertainty, with the government lacking a fixed timeline for introducing comprehensive regulations. Additionally, the country's crypto market faces challenges due to a harsh tax regime, resulting in capital flight and revenue losses for the government and domestic crypto service providers.



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