For decades, Visa and Mastercard have reigned supreme in the digital payments ecosystem, collecting fees on every swipe, tap, and online transaction. But that dominance is now being challenged by a new breed of financial instrument: stablecoins. These blockchain-based assets promise faster, cheaper, and borderless payments — potentially rewriting the rules of global finance.
Unlike Bitcoin and other volatile cryptocurrencies, stablecoins are pegged to fiat currencies like the US dollar or euro, making them ideal for everyday transactions. And as crypto firms, tech giants, and central banks race to shape the future of money, stablecoins have become the focal point of a high-stakes financial showdown that could impact billions.
What Are Stablecoins?
Stablecoins are digital assets designed to maintain a stable value by being pegged 1:1 to fiat currencies such as the US dollar (USD), euro (EUR), or Indian rupee (INR). They achieve this stability through:
Fiat reserves (e.g., cash, bank deposits, government bonds)
Crypto-collateral (e.g., overcollateralised assets)
Popular examples include:
USDT (Tether) and USDC (Circle) – pegged to the US dollar
DAI – a decentralised stablecoin backed by crypto assets
PYUSD – launched by PayPal, runs on Ethereum
These coins aim to merge the trust of traditional money with the efficiency of blockchain networks.
Why Stablecoins Are Disrupting the Global Payments Landscape
1. Big Tech & Fintech vs Traditional Finance
Tech companies and commerce platforms like PayPal, Shopify, Amazon, and Telegram are actively deploying stablecoins to bypass traditional payment networks. Their goal: eliminate middlemen like banks, Visa, and Mastercard — and retain more value from each transaction.
Shopify now enables merchants to accept USDC via Coinbase’s Base blockchain.
PYUSD, PayPal’s stablecoin, can be seamlessly integrated across millions of merchant touchpoints.
In response, Visa and Mastercard are racing to support select stablecoins and blockchains like Ethereum and Solana to stay relevant in a rapidly evolving system. This movement also sets the stage for interoperability between India’s digital rupee (e₹) and global stablecoins — enabling a hybrid digital finance ecosystem.
2. The Global Power Struggle Over Digital Money
The stablecoin boom — largely led by US-based companies — is also viewed as an extension of dollar dominance into the digital age. However, global regulators are pushing back:
Europe’s MiCA regulation limits circulation of non-euro stablecoins to protect monetary sovereignty.
Central banks across Asia and institutions like the Bank for International Settlements (BIS) warn that stablecoins could undermine local currencies and destabilise monetary policy.
In India, the Reserve Bank of India (RBI) has voiced similar concerns. RBI officials, including Governor Sanjay Malhotra, have warned against allowing private stablecoin issuers to dilute the role of sovereign currency. However, India’s stance is evolving — moving from resistance to a more regulated exploration of stablecoins.
3. CBDCs vs Stablecoins: Rivals or Allies?
India is actively piloting its central bank digital currency (CBDC) — the digital rupee (e₹) — across wholesale and retail channels. Like stablecoins, CBDCs offer:
Instant settlements
Reduced costs
Programmability
But unlike stablecoins, CBDCs are centrally controlled and serve specific domestic policy goals. Experts argue that CBDCs and stablecoins can coexist, each with a distinct role:
CBDCs can support domestic monetary policy and retail transactions.
Stablecoins can enable cross-border payments, remittances, and global trade.
A coherent regulatory framework for stablecoins — covering reserves, compliance, and issuance — could unlock enormous value for SMEs, startups, and migrant workers across India.
Final Word: Stablecoins Are Here to Stay
Stablecoins have evolved from niche crypto tools into powerful enablers of global money movement. They are:
Challenging card networks like Visa and Mastercard
Forcing central banks to innovate or adapt
Opening up new avenues for financial inclusion and cross-border finance
As India navigates this digital transformation, its choices will determine whether it becomes a leader in regulated innovation or falls behind in the global digital economy. The stablecoin revolution is already underway — the question now is whether India will embrace it or resist it.
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