The Reserve Bank of India has issued a strong caution on the growing use of stablecoins, warning that privately issued digital currencies could undermine monetary sovereignty, disrupt financial stability and weaken regulatory control. While acknowledging the technological innovation behind blockchain-based assets, the central bank remains concerned about risks related to capital flows, consumer protection and systemic vulnerabilities. The RBI has reiterated its preference for regulated digital payment systems and its own central bank digital currency as safer alternatives.