Explore the Daily Current Affairs 4 October 2025, relevant for UPSC exam. Also download quick REVISION NOTES.
Stablecoins
Definition: Stablecoins are a type of cryptocurrency that aim to maintain a stable value, usually by being pegged to a fiat currency like the US dollar or euro.
In simple terms, Stablecoins are a type of digital money (cryptocurrency) that tries to keep the same value all the time. For example, 1 stablecoin = 1 US dollar. They are used online for payments, saving money or sending money, across borders.
Major Concerns:
Context: Finance Minister has warned that India must prepare to handle the challenges posed by stablecoins, especially as they gain popularity in cross-border payments, private financial ecosystems, and even remittances.
| Area | Concern |
| Monetary Sovereignty | Widespread use of stablecoins could weaken the control of central banks (e.g., RBI) over money supply and interest rates. |
| Financial Stability | If stablecoin issuers fail to maintain proper reserves, it may cause a bank-like run. |
| Regulatory Gaps | Lack of international regulatory framework—risk of money laundering, terror financing. |
| Cybersecurity | Risk of hacking, scams, and technological vulnerabilities. |
| Capital Flight | Citizens in countries with weak currencies may switch to stablecoins, draining domestic currency. |
Prelims practice Question:
Q: What is a stablecoin?
a) A cryptocurrency that changes value daily
b) A cryptocurrency pegged to a real-world asset
c) A digital currency issued by central banks
d) A fiat currency made digital
Answer: b), A cryptocurrency pegged to a real-world asset
Climate finance
India’s Progress on Clean Energy:
- In 2024, India added 24.5 GW solar capacity – 3rd largest globally (after China and USA).
- Recognised by UN Climate Report (2025) as a clean energy leader (along with China, Brazil).
- Employment: Over 1 million in renewables sector (2023), where off-grid solar employed 80,000 (2021).
- GDP Impact: Renewables contributed to 5% of GDP growth.
- Global Leadership: India’s role in creating the International Solar Alliance (ISA) is noted.
Climate Finance Gap:
India has a requirement of $1.5 to $2.5 trillion by 2030 to meet its national targets and stay on 1.5°C pathway.
This includes capital for:
- Expanding renewables
- Strengthening the electricity grid
- Deploying battery storage
- Scaling up green hydrogen
- Transitioning to sustainable transport and agriculture.
Challenges in Climate Finance (GS paper 3):
| Area | Challenge |
| Funding gap | $2.5 trillion by 2030 needed, current flow inadequate |
| MSME access | Small players can’t access large green finance instruments |
| Institutional barriers | Funds like LIC, EPFO not yet fully engaged in green finance |
| Risk | Private sector perceives regulatory/governance risk in local projects |
| Technology | Need for digital tools to enhance transparency and effectiveness |
Mains practice question:
Q1. India’s clean energy ambitions are globally recognised, yet its climate finance architecture remains underdeveloped. Examine the structural challenges in mobilising climate finance and suggest a multi-pronged strategy to address them. (15 marks)
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