Stablecoins pose a threat to financial stability

The Reserve Bank of India announced in December that the proliferation of digital currencies could trigger a global crisis.

The regulator recalled that such instruments have no collateral and are used primarily in speculative and illegal transactions.

On June 28, the Central Bank published a report in which it pointed out the threats posed by stablecoins.

According to the regulator, the use of fiat-backed digital currencies undermines the attractiveness of cash and poses financial stability risks.

The report notes that stablecoins can be used by criminal communities. They use such tools because they cannot be tracked by supervisors.

The best alternative to such tokens are national digital currencies (CBDC).

Their issuers are the financial authorities, which have a sufficient set of tools to control the movement of funds in digital format, analysts at the Reserve Bank emphasized.