US dollar stablecoins pose challenge to global monetary policy, India says

According to India’s Chief Economic Adviser V. Anantha Nageswaran, the growing prevalence of U.S.-dollar-pegged stablecoins will present fresh challenges for monetary policy, transmission mechanisms and seigniorage for many economies. At a Mumbai event, he noted that while India’s UPI system reduces reliance on stablecoins domestically, globally the $300 billion-plus stablecoin market threatens banks’ deposit base and central banks’ tools. Policymakers will need to anticipate how digital tokens could undermine traditional monetary frameworks.