Blockchain once meant crypto chaos. Today, it’s quietly powering India’s new trust infrastructure. Just as UPI upended payments—processing over 18.39 billion transactions worth ₹24 lakh crore in June 2025, averaging 640 million daily, and handling 85% of India’s digital payments and nearly 50% of global real-time payments—blockchain is now stepping into a similar nationwide role. India’s digital evolution has followed a clear trajectory:

• Aadhaar for identity
• UPI for instant, interoperable payments
• Blockchain for verifiable trust—layered atop existing digital rails

It’s not speculation that’s decentralizing—it’s verification.

India’s Blockchain Moment: From Crypto Speculation to Digital Trust Infrastructure

Unlike the frenzied headlines of 2021’s crypto boom, the current blockchain wave is quiet, technical, and state-led. The Reserve Bank of India (RBI), Ministry of Electronics and IT (MeitY), and even state governments are building decentralized infrastructure to solve very “Indian” problems—like authentication, subsidies, digital identity, logistics, land ownership, and healthcare records.

This evolution reflects India’s digital maturity. First came Aadhaar, then UPI. Now comes verifiable trust—layered atop digital rails.

Stablecoins: Widespread Usage, Evolving Regulation

Yes, India does have stablecoins—but they’re not officially recognized as legal tender.

While India hasn’t licensed any private firms to issue rupee-pegged stablecoins or manage reserves, Indians are actively using USD-backed stablecoins like USDT (Tether) and USDC for portfolio diversification and cross-border transactions. Most of this activity flows through global platforms operating in regulatory grey zones.

But change is coming. A crypto discussion paper is in the works, expected in July 2025, with a major focus on stablecoins and cross-border payments, according to Ministry of Finance insiders.

If regulated correctly, stablecoins could become the UPI of cross-border commerce.

The Stablecoin Shift: Innovation Before Regulation

Despite regulatory ambiguity, demand for stablecoins is rising in India, particularly as private innovation pushes the boundaries. Indian users are increasingly turning to USD-pegged stablecoins like Tether (USDT) and USD Coin (USDC) for:

• Portfolio diversification
• Cross-border transactions
• Offshore payments
• On-chain exposure with reduced volatility

These transactions often occur through crypto exchanges registered with the Financial Intelligence Unit of India (FIU-IND) as Virtual Digital Asset Service Providers (VDASPs), operating in regulatory grey zones.

This demand is especially high in areas like:

Remittances: India's $135.46 billion inward remittance market (as of FY ending March 2025) could benefit immensely from stablecoins.

On-chain settlement: Offering faster, cheaper, and programmable alternatives to traditional methods.

Potential Benefits of Stablecoins in Remittances:

• Instant transfers (seconds, not days)
• Fees slashed to under 1%, from traditional 5–7%
• Mobile wallet access in rural India
• Real-time, transparent audit trails
• Reduced FX risk in volatile currency markets

While these benefits are already being realized globally—in Singapore’s Project Orchid (testing programmable vouchers), the UAE’s Digital Dirham (set for retail rollout by late 2025), and Project mBridge for cross-border central bank settlements—India’s moment to fully leverage them may arrive soon with clearer policy.

From Blockchain to Trust Infrastructure

Globally, blockchain has matured beyond coins. The real value lies in digitally verifying trust without manual paperwork or intermediaries.

Here’s how:

• Tokenization: Converting real-world assets into blockchain-based tokens—receivables, land, carbon credits
• Programmable Payments: Using smart contracts to automate disbursements (e.g., government subsidies, startup grants)
• Decentralized Identity: Enabling user-controlled, verifiable credentials (already tested in academic certificates and employment records)

India is already experimenting with all of the above.

Made-in-India Blockchain Use Cases

• Andhra Pradesh: Piloted blockchain for tamper-proof land registry
• Bihar: Exploring blockchain-based credentials for secure verification of public records
• NITI Aayog: Supporting blockchain pilots in logistics, supply chains, and pharma
• RBI: Exploring tokenized bank deposits and programmable CBDC disbursements

These projects might not make headlines, but they’re writing the operating manual for India’s digital trust stack.

Why India Needs Guardrails, Not Roadblocks

India’s cautious approach to crypto is understandable. But applying the same rigidity to blockchain could mean missing the next infrastructure wave.

The goal should be clear:
Don’t regulate technology. Regulate its misuse.

Stablecoins used for speculation? Mitigate risks.
Stablecoins used for verifiable trade? Enable them.

The same applies to tokenized assets, decentralized identity, and programmable payments.

Localize, Don’t Copy

India doesn’t need to import the Web3 vision from Silicon Valley. Our needs are different—and larger in scale. India doesn’t just need decentralized finance. It needs decentralized governance, decentralized credit, and decentralized proof of eligibility.

Blockchain’s value here isn’t in disruption—it’s in distribution. Distribution of trust. Of access. Of automation. Think of blockchain not as a currency engine, but as a Braille guide for trust in the digital economy.

What Should India Do Next?

• Create a domestic framework for INR- and USD-pegged stablecoins, regulated by RBI and FIU-IND.
• Integrate the digital rupee (e₹) with smart contracts for programmable finance.
• Enable tokenization of real-world assets through public-private consortia.
• Publish a unified national blockchain strategy that focuses on public infrastructure, not just private innovation.
• Incentivize independent audits, open sandboxes, and citizen-facing apps built on verifiable ledgers.

India isn’t late to the blockchain revolution. We’re simply choosing to build it differently—less like a financial casino, more like a public utility.

UPI transformed how India pays. Blockchain could transform how India proves, verifies, and trusts—from land titles to supply chains, from welfare delivery to cross-border trade. That might just be India’s next big leap.