Zerodha’s Nikhil Kamath Suggests Gold-Based Stablecoin Over Dollar-Linked Crypto

Zerodha co-founder Nikhil Kamath has highlighted concerns over the growing discussion around dollar-backed stablecoins, suggesting that their long-term relevance for India’s financial system may be limited, while also pointing to alternative ideas within the digital currency space.

In a LinkedIn post, Nikhil Kamath said UPI has been a major success for India and credited the Central government and Indian regulators for strengthening the country’s digital payments ecosystem despite global pressure.

Kamath raised concerns over the adoption of dollar-backed stablecoins for India’s financial system. He said, “Also, to all the smart folk who champion the need for dollar-backed stablecoins (I am speaking specifically of dollar-backed stablecoin), this seems like a bad idea, long term, for India.”

He added that in his view, such instruments, while gaining global attention, may not be appropriate for India over the long term.

Nikhil also said, “On the other hand, if there were a gold-based stablecoin, and one could monetise the unutilised gold in Indian households to return a yield, I don't know enough to talk about this, but thoughts?”

He suggested that a gold-linked stablecoin could potentially be explored as a concept to unlock value from unused household gold holdings in India. While, he added that he is not fully certain about the idea and presented it as a suggestion for consideration rather than a firm position.

His remarks come amid growing global interest in stablecoins and digital asset-backed financial instruments.

India does not have a specific regulatory framework for stablecoins, and they are neither recognised as legal tender nor explicitly banned. They are currently treated under the broader virtual digital asset, which imposes taxes and compliance requirements on crypto-related transactions. In contrast, the Unified Payments Interface (UPI) has emerged as India’s core digital payments infrastructure, which enables instant bank-to-bank transactions in real time.

The Reserve Bank of India have repeatedly highlighted concerns around financial stability, capital flows and investor protection linked to unregulated digital assets while also pushing for adoption of India’s own central bank digital currency as a regulated alternative.