Nikhil Kamath, co-founder of Indian brokerage firm Zerodha, has publicly warned that dollar-backed stablecoins pose a long-term risk to India’s financial sovereignty, while floating the idea of a gold-backed stablecoin as a potential more suitable alternative for the country.
In his post on Countries are buying gold, trading non-dollar currency pairs, and building payment infrastructure outside of SWIFT. He said India’s UPI system was an exceptional example of building independent financial pathways.
Warning about dollar stablecoins
Kamath specifically directed his concern at those advocating dollar-backed stablecoins in India. His position was direct. Supporting dollar-pegged cryptocurrencies is a bad idea for India in the long term, as it would deepen dependence on US monetary infrastructure at a time when the world is actively trying to reduce this dependence.
He credited the Modi government and Indian regulators with resisting pressure on this front, saying they responded to the call correctly despite significant external pressure to move in a different direction.
The idea of a stable gold coin
Rather than rejecting stablecoins entirely, Kamath raised a different possibility. India has one of the largest household gold reserves in the world, most of which remains idle in homes without generating any return. He suggested that a gold-backed stablecoin could monetize those underutilized assets and return returns to holders while avoiding dependence on the dollar altogether.
Kamath was careful to present the idea as a question rather than a fixed suggestion, saying he didn’t know enough about the mechanics to make a strong case but wanted to open up the conversation.
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