New Delhi: India’s consumption surged in October, buoyed by the festive season and recent rationalization in goods and services tax rates, showing economic resilience even as global growth remains uncertain, SBI Capital Markets said in its latest EcoCapsule report released on Monday. The pickup, it noted, reflects a decisive turnaround in demand after a sluggish monsoon quarter, with households and businesses alike stepping up spending.The investment banking arm of the State Bank of India drew its optimism ...

Core Insights - The article discusses the current state and future potential of stablecoins in the global payment landscape, highlighting the challenges and opportunities for adoption in various markets. Group 1: Current Market Dynamics - EBANX, a payments facilitator, reports that 100% of its customers are currently using fiat money, indicating that mainstream users are not yet adopting stablecoins [1] - Stablecoins like Tether's USDT and Circle's USDC are gaining traction as they serve as digital representations of fiat currencies, but they still account for less than 1% of global daily money transfer volume according to McKinsey & Co [4][10] - The market value of stablecoins is projected to grow from $315 billion to $1.6 trillion by 2030, contingent on increased adoption by shoppers [10] Group 2: Regulatory Environment - The Monetary Authority of Singapore has indicated that XSGD and XUSD are compliant with upcoming stablecoin regulations, positioning StraitsX as a major player in the Asian financial market [6][11] - Regulatory clarity is essential for the expansion of stablecoin applications, particularly in the US where there is a need to balance the interests of crypto exchanges and traditional banks [8][11] - The potential for confusion arises if issuers are required to create separate coins for different jurisdictions, which could diminish customer protection and complicate transactions [9][11] Group 3: Technological Advancements - Smart contracts are expected to play a significant role in the future of stablecoins by automating transactions and reducing costs associated with compliance checks [5][11] - The integration of stablecoins into e-commerce is seen as a promising application, with companies like EBANX enabling merchants to accept stablecoins alongside traditional currencies [10] - The article draws a parallel between the current adoption of stablecoins and the early days of email, suggesting that as technology improves, stablecoins will become more widely accepted [11]

Core Insights - The rising popularity of U.S. dollar stablecoins is expected to pose challenges for global monetary policy in the coming year [1] - The global market capitalization of U.S. dollar stablecoins has exceeded $300 billion, driven by favorable regulations in the U.S. [3] Group 1: Monetary Policy Implications - The introduction of dollar stablecoins will create challenges for monetary transmission and seigniorage benefits for countries [1] - Stablecoins will compete with banks as financial intermediaries and in attracting customer deposits [2] Group 2: Regional Context - India's existing instant domestic payments system, Unified Payments Interface (UPI), reduces the necessity for stablecoins compared to advanced economies [2] - India is currently not inclined to create legislation to regulate cryptocurrencies [3]

Group 1: Mergers and Acquisitions (M&A) Financing - State Bank of India (SBI) is preparing to underwrite domestic mergers and acquisitions as the Reserve Bank of India (RBI) considers regulatory changes to allow this [1][3] - SBI has extensive experience in financing outbound M&A for Indian corporates acquiring overseas entities, indicating readiness for domestic M&A financing [2][3] - The RBI's draft framework aims to provide domestic banks with a level playing field for acquisition financing, which has traditionally been dominated by foreign banks and other financial institutions [3][4] Group 2: Potential Market Impact - M&A deals in fiscal year 2024 are valued at over $120 billion (approximately ₹10 lakh crore), with a potential credit growth of ₹1.2 lakh crore if 30% of the debt component is financed by banks [5] - The regulatory changes could unlock significant value in the corporate funding lifecycle, enhancing the role of domestic banks in M&A transactions [4] Group 3: Small-Ticket Loans and Digital Financing - SBI is exploring opportunities to expand small-ticket digital loans through the Unified Payments Interface (UPI), emphasizing the need for a robust collection recovery process [6][8] - The bank is leveraging predictive AI models to offer pre-approved loans to a large customer base, with a focus on enhancing credit availability through UPI [7][10] - Vendor financing is being evaluated, allowing small businesses to access working capital against UPI-based receivables, similar to existing credit card receivables [9][12] Group 4: Financial Performance - For the quarter ended June, SBI's gross loan book increased nearly 12% year-on-year to ₹42.54 trillion, with the corporate loan book growing 5.7% to ₹12 trillion [13]