Stablecoins can disrupt capital flows to emerging markets: Eco Survey

The adoption of stablecoins and the success of US dollar-backed stablecoins issued by regulated private-sector institutions have the potential to disrupt capital flows to emerging and developing economies, the Economic Survey 2025–26 said.

 

The survey said that the outflow of capital, including with the advent of stablecoins, is a risk to watch out for.

 

“Regulated private-sector institutions can issue US dollar-backed stablecoins. Depending on their success, this carries the potential to disrupt capital flows to emerging and developing economies,” the survey said.

 

Rising market capitalisation and growing interconnections of stablecoins with the traditional financial system are at a stage where potential spillovers to the system “can no longer be ruled out”, it added.

 

The total market capitalisation of stablecoins was recorded at $305.4 billion as of December 31, 2025, marking a 49.6 per cent growth during the year.

 

This comes at a time when the United States passed the GENIUS Act (Guiding and Establishing National Innovation for U.S. Stablecoins Act) in July 2025.

 

The legislation is expected to take effect from January 2027, or 120 days after the implementation regulations are issued, whichever is earlier.

 

The Reserve Bank of India (RBI) has consistently maintained that cryptocurrencies, including stablecoins, pose risks to the financial system.

 

RBI deputy governor T Rabi Sankar had earlier stated that stablecoins pose risks of currency substitution and loss of monetary sovereignty.

 

“Stablecoins, while backed, pose risks of currency substitution and loss of monetary sovereignty, especially for emerging markets like India. We believe CBDC can meet all legitimate use cases of stablecoins without those risks,” he had said.