Why in the news?

• The launch of Marine Fisheries Census 2025 signifies a landmark step in achieving a fully digital and transformative shift in the nation’s fisheries enumeration process.

Rupee Stablecoins

• What is it?: These would be digital tokens (on a blockchain/distributed ledger) with value pegged 1 : 1 (or near) to the Indian Rupee (INR). For example, one token = ₹1.
• Features:
  • They could be used for domestic transactions, remittances, international trade settlement, as well as bridging fiat and crypto-ecosystems.
  • The token issuer would need to hold reserve assets (INR or equivalent) or other backing to maintain the peg- transparency and redemption mechanism are essential.
  • Unlike CBDC, stablecoins are typically privately issued (unless regulated otherwise).
  • As per current regulation, there is no specific legislation in India that recognises or regulates rupee-stablecoins (or stablecoins generally) as legal tender.
• Potential Benefits:
  • Remittances & cross-border payments: India is the largest recipient of remittances globally. An INR-stablecoin could reduce costs, speed up flows, avoid foreign-exchange conversion steps and enhance transparency.
  • Internationalisation of the rupee: A rupee-pegged digital token could support use of the rupee in trade/settlement and thereby reduce dependence on the US Dollar or other foreign currencies.
  • Digital payments/Fintech innovation: It could offer a bridge between fiat and blockchain worlds, enabling programmable payments, micropayments, global access, and financial inclusion.
  • Asset-backed stability: Unlike unbacked crypto assets, a well-designed stablecoin pegged to INR (with reserve backing) could provide a relatively stable medium of exchange within crypto ecosystems.
  • Enhancing export and global trade competitiveness: For Indian exporters/importers using digital trade finance platforms, an INR-token may simplify settlement and reduce Forex risk.
• Concerns:
  • Monetary sovereignty & regulation: RBI officials have cautioned that stablecoins, especially privately issued, could undermine control over monetary policy, currency issuance and payments system sovereignty.
  • Fragmentation of payment system / systemic risk: Wide adoption of private stablecoins might bypass regulated channels (such as UPI, banks), creating risks of capital flight, money-laundering, and regulatory arbitrage.
  • Reserve backing/peg credibility: The stability of the token depends entirely on backing assets, transparency and redemption rights. If reserves are inadequate or illiquid, the peg can break.
  • Legal and regulatory ambiguity: Absence of clear legal status for stablecoins in India means uncertainty around their issuance, redemption, taxation, and liability in case of failure.
  • Competition with CBDC: Since RBI is developing the digital rupee (CBDC) as official digital money, private stablecoins may compete or conflict with the CBDC ecosystem.
  • Cross-border regulatory complexity: Use of rupee-stablecoins for cross-border flows touches on foreign exchange regulation (via FEMA), payments regulatory regime, global AML/CFT obligations.
  • Volatility hidden risk: While pegged to INR, the INR itself may be volatile relative to other currencies and global participants may still face FX risk.