Could Stablecoins Become India's Next Cross-Border Payment Tool?

The position that India holds in the global crypto market is no longer one of having purely speculative traders within its borders. While it is still common for people to trade speculatively and to keep track of the BTC to INR price on exchanges like Binance, cryptocurrency is becoming co-opted into a broader conversation about the way that money moves across borders. This is significant for India, as the world's largest recipient of inward remittances, at around $129 billion in 2024 according to the World Bank.

India, as well as having a large amount of international payments contributing to its economy, is also one of the biggest adopters of cryptocurrencies. Chainalysis ranked India first in its 2025 Global Crypto Adoption Index. It scored the top place across a number of different metrics, such as retail, centralized finance, institutional sub-indices and overall.

This doesn't mean that stablecoins will be replacing banks in the next decade, or that established payment networks will be tossed by the wayside. But it does suggest that India could provide an interesting opportunity to test whether or not blockchain-based payment infrastructure can reduce or eliminate some of the frictions that cross-border payments usually generate.

Why Are Stablecoins Relevant to India's Remittance Market?

Stablecoins could be relevant for cross-border payments because, while they make use of blockchain infrastructure, they are also tied to fiat currencies, the US dollar for the most part, and so hold a relatively stable value. This makes them much more reliable than traditional cryptocurrencies, which could fluctuate between the payment being sent and being processed.

This means that an Indian worker receiving money from overseas that receives settlement in stablecoins is not really interested in playing the crypto market and engaging in speculation on the value of those assets, they're interested in getting paid. Transfers like this that occur on blockchain infrastructure can happen at any time, and the conversion into local Indian rupees can take place at a later time when it's convenient for the worker.

The eventual conversion into Indian rupees is an important factor. Stablecoin transactions that serve as settlement will still involve conversion rates, compliance with the law, taxes and concerns about the reliability of the transfer process.

Could Stablecoins Reduce the Friction of International Payments

Yes. Using stablecoins for international payments could reduce a number of the main causes of friction, especially in cases where money needs to pass through multiple intermediary organizations. Blockchain networks are able to operate all the time without any reference to the normal opening hours of financial institutions, and transactions can easily be settled directly between wallets.

But, importantly, an advantage in cost reduction should not always be assumed. Data from the World Bank shows that there are some corridors for sending money to India that are relatively inexpensive, and others that are exorbitantly more costly. For example, in the fourth quarter of 2023, the World Bank found that the cost of sending $200 to India from South Africa was 11.8% of the total, but the same amount sent from Singapore only incurred a fee of 2.6%.

In payment corridors where expenses are high or processing times are particularly slow, blockchain infrastructure could prove the best alternative. In areas where existing payment channels are reasonable in terms of prices and times, those existing channels need not be replaced.

Why Does India's Existing Digital Infrastructure Matter?

The digital-finance ecosystem of India is one that the opportunity afforded by stablecoins cannot be separated from. Digital transactions are already being embraced by many businesses and consumers. Mobile payments and services such as Unified Payments Interface (UPI) are growing and being adopted at a fast pace.

As digital financial services become more commonly used, blockchain-based systems will become easier to integrate. A report from Chainalysis in June of 2025 about the size of India's on-chain crypto market attributed its crypto market growth partly to its existing mobile-first financial infrastructure and fintech ecosystem.

All of this means that if stablecoins are introduced as a cross-border payment solution, it would not require the creation of entirely new financial habits for most businesses and consumers. Instead, they would simply be providing another settlement layer to a heavily digitized transaction economy.

How Does Regulation Affect Stablecoin Adoption in India?

As might be assumed, regulation is going to be one of the biggest factors that determine whether or not stablecoins can become a significant part of the cross-border payment infrastructure that India uses. The current approach to virtual digital assets is one that does not allow for users or businesses to treat crypto transfers the same as they do other bank transfers.

At present, the Income Tax Department states that any gains made from virtual digital assets are subject to an additional 30% tax, as well as any other surcharge and cess.

This regulatory framework is important because the usefulness of stablecoins as a cross-border payment solution is not about avoiding tax or obligations around compliance. It seems that their usefulness for reducing cross-border friction will not just require the technology itself to be useful, but also the regulatory environment to be permissive for the practical use of it.

Author: Liam Clarke

Liam is a content writer from Australia. He has been writing content for years and has a flexible style that allows him to write content to suit many topics. When he isn't writing content, he's watching classic films and providing enrichment for his cat.