India’s Stablecoin Regulatory Lags and the $68B Missed Opportunity

India’s stablecoin ecosystem in 2025 is a paradox: it leads the world in adoption yet lags in regulation, creating a $68 billion annual missed opportunity. According to Aishwary Gupta, Global Head of Payments & RWAs at Polygon Labs, integrating stablecoins into India’s international payment systems could save the country this staggering sum by reducing transaction costs and accelerating cross-border flows [1]. However, regulatory inaction and interministerial infighting have left India sidelined, allowing global competitors like the U.S., Singapore, and Hong Kong to dominate the space [2].

The Ownership Crisis in India

India’s stablecoin regulatory framework remains trapped in a bureaucratic “ownership crisis.” The Ministry of Finance, Ministry of Electronics and Information Technology, and the Reserve Bank of India (RBI) all claim jurisdiction but fail to coordinate, resulting in a vacuum where no entity takes responsibility for oversight [1]. This paralysis has delayed legislation for private stablecoin issuance, leaving businesses to rely on offshore platforms for dollar-pegged stablecoins like USDT and USDC [6]. The RBI’s parallel exploration of its e-rupee CBDC has not filled this gap, as private stablecoins remain unregulated [3].

In contrast, the U.S. has passed the GENIUS Act, mandating 1:1 cash or Treasury-backed stablecoins with monthly transparency reports and dual federal-state supervision. This clarity has positioned the U.S. to capture a $200 billion market potential by 2025 [4]. Meanwhile, Singapore and Hong Kong have implemented licensing frameworks, enabling them to attract stablecoin innovation and institutional capital [3]. India’s hesitation risks ceding its competitive edge in fintech to these jurisdictions.

Validating the $68B Missed Opportunity

The $68 billion figure, while not tied to a single official report, is corroborated by multiple industry analyses. Decrypt’s 2025 report notes that India’s regulatory gridlock has stifled cross-border payment efficiency, costing the economy billions in unrealized savings [1]. Aishwary Gupta’s estimate aligns with broader trends: global stablecoin exchange reserves hit $68 billion in 2025, but market cap growth has slowed due to systemic risks like reserve mismanagement [5]. Economist Jean Tirole warns that weak oversight could force governments into costly bailouts if stablecoins lose their pegs—a risk India’s lack of transparency exacerbates [5].

Comparative data underscores the stakes. The U.S. GENIUS Act’s structured approach has already attracted $200 billion in market potential, while Singapore’s regulatory clarity has made it a hub for stablecoin innovation [4]. India’s absence from this race is not just economic but strategic: it risks losing its Web3 talent pool, with 80-85% of top crypto professionals relocating to more accommodating markets [2].

Investment Implications and the Path Forward

For investors, India’s regulatory limbo presents both risks and opportunities. The country’s first-place ranking in Chainalysis’ 2025 Global Crypto Adoption Index highlights strong grassroots demand for stablecoins in trading, remittances, and DeFi [4]. However, institutional hesitancy persists, as banks await RBI guidance before integrating stablecoins [2]. This creates a fragmented market where offshore platforms dominate, exposing users to cyber risks and regulatory arbitrage [6].

To reclaim its position, India could adopt a GENIUS-style law requiring reserve-backed stablecoins and transparency reports [4]. Regulatory sandboxes could test use cases like cross-border payments while aligning with FATF guidelines [4]. Such measures would reduce transaction costs, attract foreign capital, and mitigate the brain drain.

Conclusion

India’s stablecoin regulatory lag is not just a policy failure—it’s an economic hemorrhage. With $68 billion at stake annually, the urgency for action is clear. While the U.S. and Asia-Pacific leaders race ahead, India’s Web3 ecosystem waits in limbo. For investors, the lesson is stark: regulatory clarity is the bedrock of innovation. Until India resolves its ownership crisis, it will remain a spectator in the global stablecoin revolution.

Source:
[1] India's Stablecoin Stumble: A $68B Missed Opportunity in ...,
https://www.ainvest.com/news/india-stablecoin-stumble-68b-missed-opportunity-regulatory-limbo-2509/
[2] India's Web3 Stalled by Regulatory Gridlock,
https://www.indexbox.io/blog/indias-web3-stalled-by-regulatory-gridlock/
[3] Stablecoins Vs CBDCs 2025: What Will The New India Choose?,
https://blog.bullsmart.in/stablecoin-vs-cbdc-india-balance-growth-crypto/
[4] The Chainalysis 2025 Global Adoption Index,
https://www.chainalysis.com/blog/2025-global-crypto-adoption-index/
[5] Stablecoins Could Cost Governments Billions, Economist ...,
https://cryptonews.com/news/stablecoins-cost-cost-governments-billions-economist-jean-tirole-warns/
[6] Navigating Regulations After US Stablecoin Law, ETBFSI
https://bfsi.economictimes.indiatimes.com/articles/indias-crypto-dilemma-navigating-regulations-after-us-stablecoin-law/123008750