India's Central Bank Weighs Stablecoin Ban Amid Monetary Sovereignty Concerns

India's central bank is signaling that it may prohibit the use of private stablecoins, such as USDT and USDC, onshore. The Reserve Bank of India (RBI) has told lawmakers that a containment strategy leaning toward prohibition remains on the table.

The RBI is concerned that foreign currency stablecoins could undermine monetary sovereignty, weaken policy transmission, fragment payments, and raise financial stability risks. It cites the growing global market for stablecoins, which has reached $311.279 billion by early July 2026.

Private crypto service providers and users in India are affected by this potential ban. There are 54 FIU-registered crypto service providers and roughly 3.93 crore KYC-verified users holding assets totalling around ₹20,436.59 crore.