Stablecoins: India's $60B Remittance Revolution
Stablecoins: Transforming India's Cross-Border Payments
India's dominance in digital payments is reshaping global finance. However, cross-border transactions remain slow and expensive. Stablecoins offer a potential solution, promising significant cost savings and efficiency improvements.
Stablecoins, digital tokens pegged 1:1 to fiat currencies and issued on public blockchains, provide a low-cost, high-speed alternative to traditional banking infrastructure. This is particularly relevant for India, with annual remittances exceeding $125 billion and international trade exceeding $1.6 trillion.
Experts estimate that switching to stablecoin-based systems could save Indian citizens and businesses over ₹5.7 lakh crore ($60 billion) annually. The key benefits include reduced transaction fees, real-time settlements, fewer intermediaries, and enhanced transparency.
Source: India AIR
Remittances to India reached a record high of $135.46 billion in FY2024-25, a 14% increase.
How Stablecoins Reduce Costs
- Remittance Optimization: Traditional channels charge an average of 3.8%. Stablecoins could reduce this significantly.
- Trade Corridor Efficiency: Streamlining FX conversions and compliance unlocks substantial savings across India's trade flows.
- Operational Streamlining: Automated smart contracts minimize legacy overheads.
- Liquidity & Speed: Stablecoin networks operate 24/7, with near-instant settlements.
- Price Efficiency: Minimal slippage due to efficient FX rails.
- Onboarding Potential: Integration with UPI and ONDC could seamlessly onboard consumers and MSMEs.
Polygon Labs CEO on Stablecoins
The Strategic Advantage of an INR-Denominated Stablecoin
Global stablecoin settlement volumes exceeded $7 trillion in 2023. India can position itself as a leader by supporting a compliant INR-denominated stablecoin, boosting offshore INR demand and enabling low-cost international commerce. This could also expand India's monetary influence and strengthen treasury reserves.
Stablecoins represent a fundamental shift in cross-border payments. With the right regulatory framework and private-sector innovation, India can achieve substantial savings and shape the future of global finance.
Disclaimer: This article is an opinion piece. Conduct thorough research before investing in cryptocurrencies. Codeum is not responsible for any financial losses.
Codeum: At Codeum, we provide comprehensive blockchain security solutions, including smart contract audits, KYC verification, custom smart contract development, tokenomics consulting, and partnerships with launchpads and crypto agencies.