India leads the world in digital payments. The number of UPI transactions hit a record of nearly 18.7 billion in May—yet the use of physical cash hasn’t declined.

In fact, cash in circulation has grown since demonetisation in 2016. As of FY25, there are over 155 billion notes in the economy, valued at nearly Rs 37 lakh crore. The RBI wants to ensure more public access to cash, and so banks are loading ATMs with Rs 100 and Rs 200 notes.

Sure, the transaction value of the e-rupee, or the digital form of the fiat currency, has increased, but it’s driven more by banks doling out allowances to employees than any real market demand.

But globally, private virtual currencies are gaining momentum.

On 17 June, the US Senate passed the GeniusGENIUSGuiding and Establishing National Innovation for US Stablecoins Act, providing a uniformly regulated framework for the use of stablecoins, a subset of cryptocurrency, the value of which is pegged to the US dollar. In 2024, tokens like USDT (Tether) and USDC (Circle) achieved a global transaction value of over $27 trillion, more thanAInvestStablecoins Surpass Visa, Mastercard in 2024 Transactions, Reaching $27.6 Trillion the combined volume of transactions through Visa and Mastercard networks that year. These tokens—with market capitalisation of $158 billion and $62 billion, respectively—promise to make transactions faster and cheaper than equivalent bank transactions over the Swift networkSwift networkThe Society for Worldwide Interbank Financial Telecommunication network is a global messaging system that facilitates transaction among over 11,000 institutions in more than 200 countries.

All of this is prompting global stakeholders to either embraceLedger InsightsSocGen Chair, ex ECB board member urges EU to embrace stablecoins stablecoins or develop their own versions. For instance, Chinese firms are reportedlyCoin TelegraphJD.com, Ant Group push yuan stablecoins to challenge US dollar dominance lobbying the regulator to launch yuan-based stablecoins.