Stablecoin Momentum Rises in India as Startups Tap Digital Currencies and UPI-PayNow Boosts Cross-Border Payments
Indian startups explore stablecoin use for cross-border payments as UPI-PayNow expands real-time remittances. Discover how stablecoins and UPI are shaping India’s fintech future.
NewsSutra
New Delhi — The digital finance landscape in India is undergoing a quiet yet powerful transformation. Indian fintech startups are increasingly exploring the use of stablecoins—cryptocurrencies pegged to fiat currencies like the U.S. dollar or Indian rupee—as tools for secure, fast, and low-cost cross-border transactions. In parallel, the UPI-PayNow integration, launched jointly by India and Singapore, is accelerating instant cross-border remittances, offering a glimpse into the future of global payments.
Together, these developments reflect a significant shift in India’s financial infrastructure—driven by regulatory adaptation, startup innovation, and the rising need for seamless digital transactions in a globally connected economy.
What Are Stablecoins and Why Are Indian Startups Interested?
Stablecoins are a subclass of cryptocurrencies designed to reduce volatility by pegging their value to a stable asset such as a fiat currency, commodity, or basket of currencies. Unlike Bitcoin or Ethereum, whose prices fluctuate sharply, stablecoins like USDT (Tether) or USDC (USD Coin) maintain parity with the dollar.
Indian fintech startups are turning to these digital assets for several reasons:
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Reduced transaction costs on international payments.
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Real-time settlements without relying on traditional banking intermediaries.
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Improved transparency and traceability on blockchain.
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Potential to support underbanked micro-entrepreneurs and freelancers receiving overseas payments.
According to a 2025 report by KPMG India, nearly 11% of Indian fintech startups in cross-border payments are actively testing or piloting stablecoin integrations for remittance and B2B services.
Notably, blockchain-based remittance platform TransFi Labs, based in Bengaluru, has already enabled USD-backed stablecoin settlements in partnership with select international payment processors, allowing Indian freelancers and SaaS startups to receive real-time payments from clients in Europe and North America.
Stablecoin Use Cases Emerging in India
Despite regulatory caution, the growth in experimentation suggests Indian innovators see real value in this space. Here are some notable examples:
1. Remittances for Freelancers
Freelancers in design, programming, and digital marketing are using stablecoins to bypass PayPal fees and banking delays. Startups like BitRemit and CeloPay India are offering wallets that allow them to receive stablecoins and convert to INR seamlessly.
2. Cross-Border SaaS Transactions
Indian SaaS firms serving U.S. and EU clients are testing USDC for subscription billing. This reduces currency conversion delays and improves predictability for accounting.
3. International Payroll Management
Emerging platforms like StablePay.io are offering international payroll solutions using stablecoins, enabling quick salary settlements for Indian engineers working remotely for global companies.
4. Blockchain-Based Escrow for Exporters
Small exporters are leveraging blockchain-based escrow smart contracts powered by stablecoins to guarantee payments before shipment.
The Regulatory Landscape: A Balancing Act
India's stance on digital assets has evolved over time. While the Reserve Bank of India (RBI) has maintained a cautious approach towards cryptocurrencies, there is increased clarity on distinguishing stablecoins from speculative crypto assets.
In 2024, the Ministry of Finance released a consultative paper on “Digital Asset Classifications,” indicating a separate regulatory framework for payment-focused stablecoins. This could pave the way for legitimate fintech use.
Additionally, in early 2025, SEBI and RBI jointly began discussions with key startups and industry bodies like IAMAI and Indiatech.org to consider sandbox testing for rupee-pegged stablecoins—potentially marking the beginning of formal experimentation.
According to fintech legal expert Neha Jaiswal, “We’re seeing regulators warm up to the idea of stablecoins as programmable, transparent payment instruments when tightly regulated.”
UPI-PayNow Integration: Cross-Border Remittance Gamechanger
While stablecoins offer a decentralized alternative, India’s Unified Payments Interface (UPI) remains the dominant force in domestic digital payments. Now, its international extension through PayNow, Singapore’s real-time payment system, is changing the cross-border game.
Launched officially in February 2024, the UPI-PayNow link enables:
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Instant, 24/7 cross-border transfers between bank accounts in India and Singapore.
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Lower remittance costs by eliminating intermediary fees.
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Direct account-to-account payments with mobile numbers or UPI IDs.
Since launch, the UPI-PayNow corridor has processed over ₹1,200 crore in remittance volume and is expected to expand to other countries including UAE, UK, and Australia by late 2025.
According to NPCI International, discussions are underway with 10+ countries to create a global UPI network that rivals SWIFT in speed and affordability.
How Stablecoins and UPI Could Coexist
While stablecoins and UPI represent different ends of the financial spectrum—decentralized vs centralized, crypto-based vs government-backed—they are not necessarily in conflict.
Industry observers believe they could coexist and complement each other:
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Stablecoins offer borderless programmability and transparency for B2B and tech-native sectors.
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UPI offers mass adoption, government trust, and integration with existing banking.
In the future, RBI’s digital rupee (CBDC) may act as a bridge between these two models, allowing fintech apps to toggle between public blockchain stablecoins and sovereign digital currency rails.
Startups Driving the Change
A few Indian startups are standing out in this landscape:
| Startup | Use Case | Tech Stack |
|---|---|---|
| TransFi Labs | Cross-border stablecoin settlements | Ethereum, Polygon |
| CeloPay India | Remittances for freelancers | Celo Blockchain |
| XendBridge | B2B Crypto-to-INR invoicing | Stellar, Binance Smart Chain |
| StablePay.io | Crypto payroll for remote teams | Avalanche, USDC |
Many of these startups are also participating in regulatory sandboxes and blockchain consortiums working with government and private banks.
The Road Ahead: Key Predictions
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Increased Regulation: Expect a formal sandbox or pilot framework for stablecoin use in India by Q1 2026.
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CBDC Integration: More UPI-enabled apps may add support for RBI’s e₹ (digital rupee) in parallel with stablecoin wallets.
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Remittance Market Shift: Traditional remittance giants may lose ground to blockchain-based micro-remittance platforms.
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Institutional Interest: Indian banks like HDFC and ICICI may explore tokenized rupee stablecoins for international trade settlement.
Final Thoughts
India is at a pivotal moment in its digital financial evolution. With stablecoin experimentation rising and UPI expanding across borders, the nation’s fintech ecosystem is exploring multi-modal payment rails—a convergence of decentralization and state-driven innovation.
As regulators refine their stance and startups scale their pilots, India could emerge as one of the few countries to harmonize public payment infrastructure with crypto-native technologies—setting the stage for a truly inclusive, efficient global payments ecosystem.
