A few days ago, Nikhil Kamath wrote a short post online. The Zerodha co-founder, often counted among the voices people turn to when looking for the best stock advisor in India, shared a thought that sounded small at first. But it has now turned into a big debate in the world of money
His message was simple. If India ever uses stablecoins in a big way, it should not rely on coins linked to the US dollar. A coin linked to gold would suit India much better. And maybe, he hinted, that idea matters for the whole world too.
Let us slow down and understand what he is really saying. Once you see the full picture, it gets very interesting.
First, what is a stablecoin?
You may have heard of Bitcoin. Its price swings up and down every day. One morning it is worth ten lakh rupees. By evening it may drop sharply. That makes it hard to use for normal payments.
A stablecoin is the calm cousin of Bitcoin. It is also digital money. But it is built to keep a steady value. Most stablecoins today are tied to the US dollar. So one coin is always worth around one dollar.
How? The company that creates the coin keeps real dollars or safe US government bonds in a bank. For every coin in the world, they hold one dollar in reserve.
Think of it like a cloakroom token at a wedding. You give the staff your shawl. They hand you a token. You can come back any time and ask for your shawl. The token has value only because something real is locked away in the back.
Stablecoins work in the same way. The token in your phone has value because real assets are sitting in a vault somewhere.
Why the dollar rules the stablecoin world
When companies first built stablecoins, they had to pick something to back them up. The easy answer was the US dollar.
Most international trade is settled in dollars. Most central banks hold piles of dollars. People around the world trust the dollar more than their own local money in many cases. So pegging a coin to the dollar made instant sense.
Today, dollar stablecoins are huge. The two biggest are called USDT (Tether) and USDC. Together they handle hundreds of billions of dollars. USDT alone has more than 180 billion dollars worth of coins in the market. They move trillions of dollars every year between people, traders, and businesses.
In places like Argentina, Turkey, and Nigeria, where local money loses value fast due to inflation, people use these coins to protect their savings. A worker in Lagos can hold digital dollars on a phone. A small business in Buenos Aires can pay a supplier across the world in seconds. For many of them, this has been a real blessing.
So what is the problem?
Here is the catch. The more people across the world use dollar stablecoins, the more the world depends on the US dollar all over again. Just in a new, digital form.
That makes a lot of countries uncomfortable. They have been trying to reduce their dependence on the dollar for years. They worry that the United States can use the dollar as a weapon. In recent years, the US has frozen assets of countries it does not agree with. It has cut off banks. It has blocked payment systems.
If big parts of a country’s digital money start sitting on dollar coins controlled by American companies, the same risks come into play. A foreign government, in theory, could freeze those coins. A US law could change overnight. The country using those coins would have very little say.
This is what worries Kamath. He is not against stablecoins. He is against India, and possibly the rest of the developing world, being pulled deeper into a dollar based digital system at a time when the world is trying to do the opposite.
Why gold is back in the conversation
For thousands of years, gold has been the world’s safety net. It has survived wars, empires, crashes, and broken currencies. It is not controlled by any one country. That is its biggest strength.
In recent years, central banks across the world have been buying gold like never before. China, India, Russia, Turkey, Poland, all of them have been stocking up. The price of gold has shot up too. It crossed 5,000 dollars an ounce in early 2026. That is one of its biggest rallies in history.
So the question naturally followed. If digital coins can be tied to the dollar, why not to gold?
Turns out, this is already happening. Two coins, called PAX Gold and Tether Gold, lead this new market. Each coin stands for one ounce of real gold sitting safely in a vault in London or Switzerland.
A few years ago, gold-backed coins were a small corner of the crypto world. Today, they are growing fast. By early 2026, the total market for tokenised gold crossed 6 billion dollars. It grew more than 350 percent in a single year. Big firms, along with several stock market advisory services, are now putting hundreds of millions of dollars into these tokens as a safer bet against falling stock markets and weak currencies.
The technology works. The demand is real. The only big question is whether this idea can grow to challenge the giant dollar stablecoins one day.
Why Kamath thinks gold suits India
Now bring this idea home. India is special when it comes to gold.
Indian families hold somewhere between 25,000 and 34,000 tonnes of gold. That may be the largest private stockpile in the world. It sits in lockers, in cupboards, in old bank vaults. Most of it does nothing. It earns nothing. Year after year, it just rests.
Kamath asked a simple question. What if even a small part of that gold could be turned into a digital coin? Each coin would stand for a real piece of gold stored safely under strict rules. Owners could earn a small return. They could send it across the country in seconds. They would not have to sell their gold. Just unlock its sleeping value.
For India, this idea has real meat. It would bring billions of dollars of idle wealth into the formal economy. It would also reduce the country’s huge gold imports, which strain the rupee every year. Most importantly, it would let India build a powerful digital money system without depending on the dollar.
This is also the only place Kamath really brought up UPI. He used it just as a quick example. He said India’s UPI shows that the country can build big digital money systems on its own. So building a strong gold-linked digital coin is not a wild dream.
The other side of the story
It would be unfair to call dollar stablecoins villains. They have done real good. They give millions of people in weak economies a way to protect their savings. They make sending money across borders cheap and fast. They have opened up modern finance to people who never had a proper bank account.
A gold-backed coin also has its own problems. Big problems.
Who will store all that gold? How will you check the purity of family jewellery, which is often mixed and not pure investment-grade bullion? Who will audit it? What if the company holding the gold goes bankrupt? How do you make sure people actually get their gold back?
Gold also does not pay any return on its own. So if a gold coin promises a yield, it has to come from lending or trading the gold somewhere. That brings new risks. Some past gold schemes in India have failed because of exactly this kind of complex lending behind the scenes.
Ashish Singhal of CoinSwitch responded to Kamath with these very doubts. He agreed that the direction is right. But he warned that building this at India’s scale, with hundreds of millions of users, is far harder than it sounds.
What this could mean for the future of money
Step back for a moment. The bigger story here is about who controls digital money in the years to come.
Right now, the dollar rules. But cracks are showing. Central banks are buying gold. Countries are trading in their own currencies. New payment systems are being built that skip American banks. And gold-backed digital tokens are quietly growing in the background.
This does not mean dollar stablecoins will disappear. They are too useful for that. But they may not stay alone at the top. The world may move toward a mix. Some payments in dollar coins. Some in gold-linked coins. Some in central bank digital currencies issued by governments. Each playing a different role.
For investors, this means new options. A small share of a gold-backed coin could become a normal part of a savings plan. For businesses, it could open up new ways to pay across borders. For governments, it could mean less control by one single currency.
A simple closing thought
What makes Kamath’s post valuable is not the gold idea by itself. It is the question he is forcing into the open.
As money becomes more digital, the real power moves to whoever owns the system underneath. If everything we hold and spend is tied to a foreign currency, we slowly lose a piece of our freedom. If we build options of our own, we keep that freedom.
Gold has played that role for centuries. Maybe in this new digital age, it has one more chapter left to write. Whether India, or the world, listens to that idea is a story still being written.
For once, a short tweet really was worth a long think.
