The new US administration has made digital finance an early priority, championing three pieces of legislation governing digital assets—the GENIUS Act, the CLARITY Act, and the CBDC Anti-Surveillance State Act.
The first bill was signed into law by President Donald Trump on July 18, while the latter two recently advanced to the Senate. The laws have given a boost to advocates of digital assets, but face harsh criticism from consumer advocacy groups and experts over safety and stability concerns.
As US policymakers continue to consider the promise and perils of digital finance, they should look toward the experience of India, a global leader in digital payments and digital public infrastructure, for critical lessons on the centralization and adoption of consumer-facing digital finance.
Public foundations, private applications
Although the bills collectively clarify the federal regulation of many digital assets for the first time, they broadly sideline the federal government from the developing ecosystem of digital finance.
The clearest manifestation of this trend is the ban on Federal Reserve digital currencies in the CBDC Anti-Surveillance State Act, a policy that—if enacted—would make the United States an international outlier.
For its part, the CLARITY Act would effectively reduce federal scrutiny of digital assets like cryptocurrencies. These aspects of the new legislation represent components of a broader agenda of deregulation, but they carry particular risks for the development of secure and successful digital finance in the United States.
India offers a useful lesson in productive state-led digital finance, demonstrating a healthy balance between public-led initiatives and private sector partnerships that ultimately deliver quality options to consumers.
India’s central government has proactively developed “digital public infrastructure” (DPI) under the India Stack framework and positioned the state as a provider of digital public goods.
In India’s digital payments ecosystem, for instance, the National Payments Corporation of India (NPCI) oversees the Unified Payments Interface (UPI) and serves as the central hub for real-time transactions between banks, payment service providers, and consumers.
However, because of UPI’s openness and interoperability, private sector platforms are among the biggest winners of India’s digital finance revolution, including US firms—Google Pay and PhonePe (owned by Walmart) process nearly 90% of transactions.
Moreover, government involvement through the centralized hub unlocks improved consumer data protection and record-keeping to combat fraud and financial crime.
Achieving adoption
India’s experience also demonstrates the key role of adoption in the transition to digital finance.
Certainly, many of the initial applications of stablecoin technology will be for back-end transactions in financial markets, but US companies will eventually look to harness consumer-facing stablecoins to ease retail payment costs and enable new offers or discounts.
As consumers adapt to novel technologies and navigate a potential proliferation of digital asset offerings, adoption will be a major roadblock—especially given the sluggish US shift to digital payments.
India’s digital finance adoption has been remarkable. With difficult initial conditions, the Asian country has emerged as the global leader in real-time digital payments, processing 18 billion transactions each month.
The Indian government achieved this rapid adoption through forward-looking initiatives that laid the groundwork for the digital finance ecosystem, including the aggressive implementation of the “JAM trinity” of banking, identification, and mobile access.
Then, in designing the ecosystem, NPCI prioritized simplicity, convenience, and cross-platform integration—all boons for otherwise reluctant or unaccustomed consumers.
Lastly, political initiatives played a major role in pitching digital finance to the wider population, exemplified by the public-facing Digital India program.
Due to variations in economy and demography, the Indian experience does not map directly onto the United States, but policymakers should heed the universalizable lessons on the importance of complementary digital infrastructure, consumer-friendly principles, and awareness-building.
Policy outlook
How can US officials integrate these insights into the policy agenda for digital assets? First, the US government should embrace centralization, either through proactive public development or—more likely—through pointed regulation of private sector players.
For back-end stablecoin applications, the development of a central hub akin to NPCI would lend stability to the emerging digital financial system, as well as improved documentation and cybersecurity.
For consumer-facing applications, although the US government is unlikely to develop or require a unified digital assets platform, regulations aimed at ensuring openness and interoperability will help stem the growth of a complicated landscape of siloed proprietary stablecoins.
Second, if the administration intends on making the United States the “undisputed leader in digital assets,” it must take adoption seriously. To build up complementary infrastructure, India proliferated bank accounts and mobile phones—the US government could focus on augmenting connectivity or spreading access to new financial technologies like digital wallets.
Moreover, adoption relies on trust. If regulators continue to underdeliver on consumer protection, the United States will struggle to maintain leadership on digital assets for retail applications. But if the US government follows the Indian example, companies and consumers alike will benefit from the new era of digital assets.
Andrew Gordan is a Motwani Jadeja US-India fellow at the Pacific Forum, where he researches Indian tech diplomacy. He also serves as a junior fellow in the South Asia Program at The Stimson Center think tank. He received his BA in Government from Harvard and is a recipient of the Boren and Fulbright-Nehru scholarships. He has previously worked at The Council on Foreign Relations, Wilson Center and Harvard’s Davis Center.
