"If large stablecoins are linked to some other currency, there is a risk of dollarization," RBI Deputy Governor Rabi Sankar has said.

Stablecoins are an existential threat to policy sovereignty and are only useful to a few countries, said Reserve Bank of India Deputy Governor Rabi Sankar at an event, according to the local news platform The Hindu.

Given the concerns around stablecoins, central bank digital currencies (CBDC) are better "stable solutions" for every country, Sankar said.

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Traditionally, payment systems such as RTGS, NEFT, and Unified Payments Interface (UPI) have relied on complex wired networks

In a proactive move to address potential disruptions caused by catastrophic events or volatile situations, the Reserve Bank of India (RBI) has unveiled a new initiative: the Lightweight Payment and Settlement System (LPSS). This innovative system aims to provide uninterrupted financial services even when conventional payment systems are temporarily unavailable due to disruptions in the underlying information and communication infrastructure.

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