In a post on LinkedIn, the investor and entrepreneur co-founder praised India’s digital payments infrastructure, calling UPI a transformative success story, while supporting the Indian government and regulators to resist pressure to aggressively accept dollar-backed stablecoins.
Kamath argued that stablecoins pegged to the US dollar are not necessarily compatible with India’s long-term strategic and financial interests. While many countries and fintech companies globally are exploring dollar-linked stablecoins for cross-border payments and digital finance applications, he suggested that over-reliance on such instruments could ultimately strengthen the dollar’s dominance in emerging economies.
“UPI has been incredible for India to say the least. Even for all the smart people, some of my friends who champion the need for dollar-backed stablecoins (I speak specifically for dollar-backed stablecoins), this seems like a bad idea, long-term, for India. Where credit is due, if there is pressure from the Modi government and Indian regulators, maybe this is in hand. There were gold-based stablecoins, and no gold in Indian households was unused. Can return yield by monetizing, don’t know enough to talk about this, but think?” Kamath said.
Instead, Kamath posited the possibility of a gold-based stablecoin for India, given the country’s deep cultural sentiment for gold and large-scale domestic holdings of the precious metal. India is estimated to have one of the world’s largest private gold reserves, much of which is locked up in households and generates no financial returns.
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According to Kamath, the gold-backed digital token could potentially help monetize these passive assets while also offering investors a yield-generating avenue. Although he clarified that he doesn’t know enough about the subject to make definitive claims, the idea raises broader questions around whether blockchain-based financial products could eventually be tied to real-world assets like gold rather than fiat currencies.
India has so far taken a cautious regulatory stance towards private cryptocurrencies while simultaneously promoting digital public infrastructure such as UPI and digital rupee initiatives led by the Reserve Bank of India.
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