Stablecoin-based Remittance and Adoption in India Efficiency, Barriers, and Financial Inclusion Impact
Kedar Mashalkar
B.Tech (Computer Science and Engineering)
Parul Institute of Technology, Faculty of Engineering and Technology
Parul University, Vadodara, Gujarat, India
Enrollment No: 2203051050287
Abstract—India received $125 billion in inward remittances in 2023, making it the world's largest recipient of migrant worker transfers. The bulk of these flows traverse traditional channels — SWIFT-based bank wires, money transfer operators such as Western Union, and informal hawala networks — that charge between 5% and 12.66% of transfer value and require one to five business days for settlement. Stablecoin rails, operating on blockchain networks such as Tron (USDT) and Stellar (USDC), complete transfers in seconds at fees below one US dollar, offering a structural cost advantage of four to thirteen times over conventional banking. Yet widespread adoption in India faces compounding barriers: an unresolved regulatory framework under the Foreign Exchange Management Act, persistent last-mile cash-out deficits affecting 52% of the rural population, and the Reserve Bank of India's explicit concern that dollar-pegged stablecoin adoption could trigger currency substitution and erode monetary sovereignty. This paper compares stablecoin rails against traditional remittance channels across cost, speed, and accessibility dimensions; examines India's current regulatory environment; and analyses the financial inclusion implications of stablecoin-based remittance for India's 13 million overseas workers and their rural households. The findings suggest that stablecoins offer meaningful efficiency gains for high-value, urban-recipient corridors, but face structural constraints that limit their near-term applicability to India's financially excluded population without targeted regulatory and infrastructure interventions.
Keywords: stablecoin, remittance, India, financial inclusion, USDT, USDC, RBI, CBDC, FEMA, dollarisation
