EXPLORING THE GLOBAL ADOPTION OF STABLECOINS AND INDIA'S STRATEGIC PREFERENCE FOR CENTRAL BANK DIGITAL CURRENCY

This paper attempts to explore the adoption of stablecoin by advanced economies like the USA to enhance innovation in decentralized finance platforms, some emerging markets, and developing countries (EMDE) for the dollarization of their own devalued fiat currency, and the case of India adopting CBDC over stablecoins. The paper discusses the market capitalization of some stablecoins in developed economies, their components, risks, and regulations.` The research relies on a meta-analysis of qualitative and quantitative data, as well as interviews with financial experts and bank managers. It indicates that stablecoins can disrupt financial stability and impact India’s monetary policy, further increasing the income inequality gap, and recommends the solution of Central Bank Digital Currency (CBDC) to enhance financial inclusion. The research data also highlights the use of stablecoins by illicit addresses, which can escalate problems of terror funding and money laundering for India.