In a post on LinkedIn, the investor & entrepreneur co-founder praised India’s digital payments infrastructure, calling UPI a transformational success story, while also backing the Indian government and regulators for resisting pressure to aggressively embrace dollar-backed stablecoins.
Kamath argued that stablecoins pegged to the US dollar may not necessarily align with India’s long-term strategic and monetary interests. While several countries and fintech firms globally are exploring dollar-linked stablecoins for cross-border payments and digital finance applications, he suggested that excessive dependence on such instruments could eventually strengthen dollar dominance within emerging economies.
“UPI has been incredible for India to say the least. Also to all the smart folk, some friends of mine who champion the need for a dollar backed stable coins(I’m speaking for dollar backed stablecoin specifically), this seems like a bad idea, long term, for India. Credit where it’s due, to Modi govt and Indian regulators, you probably got this one right in the face of a lot of pressure. On the other hand if there were a gold based stablecoin, and one could monetize the unutilised gold in Indian households to return a yield, don’t know enough to talk about this, but thoughts?” Kamath said.
Instead, Kamath floated the possibility of a gold-based stablecoin tailored for India, given the country’s deep cultural affinity for gold and massive household holdings of the precious metal. India is estimated to hold one of the world’s largest private gold reserves, much of which remains locked in homes and generates no financial return.
According to Kamath, a gold-backed digital token could potentially help monetise these idle assets while also offering investors a yield-generating avenue. Though he clarified that he does not know enough about the subject to make definitive claims, the idea raises broader questions around whether blockchain-based financial products could eventually be linked to real-world assets such as gold instead of fiat currencies.
India has so far adopted a cautious regulatory stance toward private cryptocurrencies while simultaneously promoting digital public infrastructure such as UPI and the digital rupee initiative led by the Reserve Bank of India.
(Disclaimer: The recommendations, suggestions, views, and opinions given by the experts are their own. These do not represent the views of The Economic Times.)
