Amongst India’s neighbours, Bhutan has been at the forefront of crypto mining, utilizing its appreciable hydropower. It additionally holds cryptocurrencies in a strategic reserve in its Gelephu Mindfulness Metropolis. Based on reviews, Bhutan owns $1.1 billion in such reserves. Pakistan has additionally introduced its intention to legalise cryptocurrency to draw overseas funding.
The US has introduced the creation of a strategic reserve of cryptocurrencies that features digital currencies seized by regulation enforcement businesses. It stays to be seen whether or not this is able to show to be another retailer of worth like gold. Nevertheless, the volatility inherent in cryptocurrencies would cut back its utility as an inflationary hedge.
In India, cryptocurrency value about $37 million has been seized by regulation enforcement businesses resulting from unlawful and felony actions. The Finance Invoice 2025 has amended the definition of undisclosed revenue to incorporate digital belongings. This might translate into extra seizures.
A strategic reserve of seized digital belongings would counter-intuitively be seen as a optimistic sign for the cryptocurrency market, because it turns into a part of the sovereign kitty. Based on IMF’s just lately revealed guide on stability of funds, strategic reserves are to be handled in the identical means as cross-border land acquisitions or spectrum licence buy.
The RBI has launched a central financial institution digital coin as a substitute for stablecoins. However with the maturing of the decentralised community, stablecoins have change into a drive to reckon with. That they’re pegged to gold or a fiat forex has seen them surge.
Their world market worth rose to almost $200 billion in early 2025. Many governments that again stablecoins have sought to train management via licences given to issuers and have mandated full reserve backing, audits, statutory liquidity necessities and investor safety. Stablecoins additionally current a chance for India to streamline the huge remittance market and foster innovation.
They’ve the potential to facilitate multinationals bringing in funding to make native funds for merchandise in the native forex. In the long term, it might assist India get hold of a big market share on Net 3 platforms. A rupee-backed stablecoin could be a danger mitigation strategy to dollarisation, sustaining financial autonomy and limiting import of exterior stablecoins tied to foreign currency. Current IMF tips classify stablecoins as monetary devices. That is in distinction to treating cryptocurrencies as non-produced, non-financial rights.
So the new developments sign that cryptocurrencies can not be dismissed as a fringe phenomenon. Monetary markets are leveraging blockchain expertise by introducing new interest-bearing merchandise. There may be an ongoing effort in the direction of tokenisation of monetary belongings and rising institutional funding in cryptocurrencies. It’s a future that envisages better integration of cryptocurrencies into the monetary system.
Geetha Ravichandran
Former bureaucrat and creator, most just lately of The Spell of the Rain Tree
