Agentic payments are here: Why India needs a rupee-based stablecoin
As the founder of a global payment solutions company, I have a sense of pride when I speak about India's payment systems to our global customers. India has offered 24/7 settlements for all types of payments for years and many nations are only now catching up with it. Our Unified Payments Interface (UPI) stands as a world-class example. In order to retain this leadership position, India needs to be nimble about a new paradigm that is emerging in the global payments landscape: programmable payments.
These refer to a type of financial transaction where the execution and conditions of the payment are directly embedded in the software code associated with it. This means pre-set rules that dictate when, how and to whom a payment should be made without requiring manual intervention for each such programmed transaction.
This shift towards programmable payments, driven by advancements in blockchain technology, artificial intelligence (AI) and smart contracts, allows for automated transactions triggered by predefined conditions, auditable payments and much else that we cannot fully fathom today. While India has been a trailblazer in real-time payments, we must embrace the opportunity presented by the rise of programmable money to retain our hard-won leadership.
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India has already taken initial steps in this direction. The ongoing pilot project of a Central Bank Digital Currency (CBDC)—a digital blockchain-based form of a country's official currency issued and regulated by its central bank, representing a direct liability of this monetary authority, like physical banknotes and coins—has programmable features on its test agenda. Further, the National Payments Corporation of India's (NPCI) e-Rupi initiative has demonstrated an ability to issue payments for specific predefined use cases. India is also participating in a global effort by central banks to streamline cross-border payments.
However, the global landscape is evolving at a blistering pace. Fuelled by innovations initially explored within blockchain and cryptocurrency ecosystems, countries like the US are now rapidly pursuing the widespread adoption of programmable money. They are leapfrogging ahead by leveraging the functionality and flexibility offered by stablecoins—a type of blockchain-based digital asset designed to peg its value to that of a relatively stable-value asset, like a government issued fiat currency. Simultaneously, experiments in tokenization—creating 'digital twins' of real-world assets for these to be managed, transferred and traded more efficiently and transparently—are paving the way for efficiencies in asset ownership and transfer.
Also Read: Will India's e-Rupi be a game changer like Kenya's M-Pesa?
While the two operate independently today, the convergence of tokenization with programmable payments in the future promises to unlock a truly advanced financial services system. This convergence will enable highly automated, conditional and transparent financial transactions, revolutionizing everything from supply-chain finance to personalized lending.
Countries are exploring diverse models for handling the emergence of stablecoins. The models have ranged from light-touch regulation to heavy oversight and span both private and banking-sector issuances of stablecoins. India needs to discern and adopt the model that best suits our financial and regulatory environment.
The CBDC is an excellent instrument for some applications, like reducing cash usage and facilitating offline payments. But it may not be the optimal vehicle for enabling a broad-based transition to programmable money. To maintain our leadership position and enable consumers and businesses to fully embrace the potential of programmable money, we must expand our efforts beyond the CBDC's current scope, fostering a wider ecosystem of innovation and adoption. The country needs a stablecoin based on the Indian rupee issued by regulated participants.
Also Read: The rupee's digital future is far more relevant than its domestic heritage
India's framework of capital controls presents a challenge and an opportunity as we make this leap into programmable payments. Capital controls create a complex set of constraints in implementing such a transformative programme. At the same time, the architecture of programmable payments can streamline compliance, enhance real- time monitoring capabilities and enable better enforcement of our capital controls with substantially lesser friction.
The transition to programmable money will require substantial investment from commercial banks to upgrade their existing infrastructure. This investment dovetails well with the underlying shift to a world dominated by artificial intelligence. The emerging 'agentic world,' where autonomous AI agents will increasingly manage tasks and transactions, will demand 'agentic payments'—transfers that are not merely small, fast and low-cost, but intelligent, conditional and capable of being executed autonomously by these task-oriented AI bots. This symbiotic relationship underscores the urgency and strategic importance of broad-basing our efforts in the field of programmable money.
The future of finance is being written by tokenization and AI with programmable money as a foundational element. If India is to maintain and fortify its leadership in the global payments landscape, we must think and act swiftly to enable an Indian rupee- based stablecoin and facilitate the adoption of programmable payments.
The author is the founder and CEO of Pay3.
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