India’s massive Web3 ecosystem remains paralyzed by a bureaucratic turf war that warns industry leaders are sacrificing the nation, and Asian neighbours are moving forward in a clear stubcoin framework as the US guides financial institutions through landmark legislation.
“None of them,” said Aishwary Gupta of Polygon Labs’ Global Head of Payments of Payments & RWAS. DecryptionWhen asked if Indian banks are ready to support Stablecoin Infrastructure.
In an interview with DecryptionGupta discussed India’s position in what he describes as a new “crypto cold war.”
He estimates India could save $68 billion (£5.7 rakh) a year by integrating stubcoin into international payment flows, but regulatory omissions have shunned one of the world’s largest Web3 developers and user bases while other countries are moving forward.
President Trump I signed the law to act genius In July, we will provide clear regulatory guidelines for American financial institutions to issue stable ones. Major players to prepare Under an established framework, dollar-backed crypto tokens.
Behind India’s regulatory paralysis is what is known as the fundamental “ownership crisis” that Gupta witnessed through direct interactions with government agencies across the bureaucratic spectrum.
“No one wants to consider this as ownership,” Gupta explained, explaining the coordination challenges involved in the Ministry of Finance and the Ministry of Electronics and Information Technology.
He also flagged the Center for Advanced Computing, the Central Committee of Direct Tax, and the Financial Information Unit, with each department touching on various aspects of cryptographic regulations, none of which were responsible.
“Everyone says other departments should take the lead, but no one says there’s a value in launching this initiative,” Gupta said.
India is struggling to identify single point people, but Dubai operates via Vara, HKMA through Hong Kong, MAS through Singapore, and via Thailand through dedicated government blockchain organizations.
“I do this in almost every Asian country, but not in India as a whole, because I don’t know where to start or who to approach,” Gupta said, listing his work in designing real-world asset products for governments across the region.
The conversation with Gupta bank executives reportedly revealed a consistent pattern of institutional he rooted in actual concerns, carefully in filing a lawsuit without clear guidance from the Reserve Bank of India.
“Their biggest challenge isn’t that they don’t want to do it, they don’t know what the RBI’s attitude is,” Gupta explained, noting that the bank will soon accept the Stablecoin infrastructure after receiving clear guidance. ”
But while I’m talking DecryptionSuraj Sharma, head of India (Law and Compliance) at Crypto Exchange gate.io, defended regulatory attention, citing “legitimate concerns – Monatary sovereignty, capital flight, and systemic risks.”
“Unregulated stability flows can circumvent capital controls and undermine macroeconomic stability,” he said.
Sharma added: “Until there is a policy that distinguishes use cases such as remittances, B2B settlements, and on-chain FX, risk outweighs rewards,” he says, encouraging transparency and compliance before moving forward.
While RBI continues to drive its digital rupee initiative, Gupta is Central bank digital currency The approach addresses real opportunities.
Existing cross-border payment revenues, which allow banks to earn between $2,000 and $3,000 on an international transfer of $100,000, create institutional resistance to cost-cutting technologies, he said.
“We need one bank to actually go out and start doing it to get this whole ripple effect and create it,” he said. Competitive pressure pointed to how a single agency can drive industry-wide adoption when it demonstrates cost reductions through Stablecoin integration.
Brain drainage
The regulatory vacuum accelerated the drainage of the brain, which said it had already happened, rather than the gupta approaching.
“A lot of people have already moved. I don’t think they’re still moving. Most of the top talent is already there,” he said.
Despite raising about $5.2 million (£437.43 crores), Through crypto taxationIndia does not have a meaningful regulatory framework to protect users or promote innovation.
With its founder from India, even Polygon has become a global leader in stubcoin infrastructure, helping Indian startups move rather than “making talents successful”;
If you can’t beat them
India’s delays occur even as regional competition is intensified, and Japan reportedly reportedly said JPYC license Issues stablecoin supported by the first yen, backed by domestic savings and government bonds.
South Korea also appeared as a top competitor with a ruling political party and an opposition party Submitting a competing stubcoin invoice This grants financial regulators emergency powers while establishing a comprehensive framework for winning.
Meanwhile, Hong Kong’s stablecoin ordinance It’s been effective since last monthstrict KYC requirements have raised industry concerns, but they have positioned cities worldwide to regulate Stablecoin publishers who have coordinated them globally.
Even in China, despite restrictions on crypto trading, is It is reportedly Considering former supporters of Hong Kong and Shanghai stubcoin pilots.
“While the world economy has shifted to programmable money and tokenized assets, stubcoin remains under-leveraged and misunderstood in the Indian regulatory discourse,” said Upmanyu Misra, co-founder of TCX. Decryption.
Misra describes Stablecoin Race as “geopolitical competition,” saying that with the US already moving, and that “India must act now” if Europe and the UK want a seat in digital finance for the next decade.
“Indian fintech builders are ready to move, but they need a signal rather than a siren,” he said.
Over 86% of financial institutions are open to adopting stubcoins, with a third saying they already using them. According to more than half of those planning to integrate them within three years, citing speed, stability and settlement efficiency as key drivers. Ripple’s 2025 New Value Report.
Gupta remains cautiously optimistic about India’s ultimate progress, and has identified three teams ready to launch Stablecoin Services immediately with regulations clarity.
He suggests opening an existing payment infrastructure Brazilian PIX SystemAllows 10% of Polygon’s global payment volume through an open API that integrates Stablecoins.
However, Gupta acknowledges that unlike the US free float market, India faces its own constraints as a capital-controlled economy.
This capital control framework means that “CBDC will become an important element for India,” Gupta noted.
He said India can enable tokens that are wrapped in other blockchains or ERC-compliant tokens, which can promote international business while maintaining regulatory compliance.
“I’ve always had hope… a lot of teams that I want to make it possible, and I want it to be possible,” he said.
