Reserve Bank of India (RBI) Governor Sanjay Malhotra has urged central banks across the globe to prioritize Central Bank Digital Currencies (CBDCs) over stablecoins to facilitate more efficient and secure cross-border payments.Â
Speaking at the annual meeting of the World Bank Group and International Monetary Fund (IMF) in Washington, DC, Malhotra emphasized the advantages of CBDCs over private cryptocurrencies and stablecoins, highlighting their role in preserving monetary integrity and providing the reliability of fiat-backed digital currencies.
Malhotra explained that CBDCs can be tokenized, offering similar flexibility to stablecoins while maintaining the “singleness of money.” He stressed that the full potential of CBDCs for international transactions can only be realized if other countries adopt similar frameworks.
“Unless other countries also adopt CBDC, we are not going to see the benefits of CBDC insofar as cross-border payments are concerned,” he said.
He therefore called on central banks and financial authorities worldwide to promote CBDCs and develop interoperable systems that facilitate seamless cross-border payments.
Addressing India’s domestic payment landscape, Malhotra noted that existing systems are already efficient, fast, and low-cost, reducing the immediate need for CBDCs or stablecoins for local transactions. Instead, the RBI is focused on piloting both retail and wholesale CBDCs to improve cross-border transaction efficiency and strengthen India’s position in the global digital payments ecosystem.
The RBI Governor also reiterated the central bank’s cautious stance on cryptocurrencies, warning that private digital assets carry risks for monetary policy, capital account flows, and money laundering.
Malhotra emphasized that, in comparison, CBDCs offer a safer and more regulated alternative for digital finance, making them preferable for large-scale adoption.
This call for global adoption of CBDCs underscores India’s commitment to advancing digital finance while maintaining financial stability.
By conducting pilot projects and exploring innovative solutions for cross-border payments, the RBI aims to position India as a leader in CBDC development and foster a secure, efficient, and transparent digital currency framework for the international financial system.