The competition for adoption of the crypto gained momentum this week, with governments and financial authorities of the UAE, India, China, and Turkmenistan expressing final crypto-related plans. 

Week in Crypto Adoption: Central Banks vs Private Money

UAE banks race for dirham stablecoins! India pushes CBDCs over private tokens! China makes digital yuan deposit-like! Turkmenistan legalizes mining and exchanges! The battle for digital money heats up.

Let's unpack this… pic.twitter.com/v85cgMCfHf

The stablecoin market has also continued to grow at a high pace due to the institutional need to make settlements quicker, cheaper, and globally available. The total stablecoin market capitalization increased by $102 billion in new supply in the year 2025 alone, increasing the total market capitalization of these coins from $205 billion to $307 billion in 2025. 

Central banks are however responding with central bank digital currencies. Although years of research have already been conducted, there are only three CBDCs operational today with 49 countries still in pilot or development phases.

The United Arab Emirates made a big step into regulated on-chain money when RAKBank was granted in-principle permission by the Central Bank of the UAE to issue a dirham-backed stablecoin. The token will be pegged 1: 1 to UAE dirhams, backed by audited reserves and real-time transparency, which will give more confidence to institutional users.

The shift of RAKBank puts it in the same type of stablecoin race with other participants such as e& (Etisalat), the USDC expansion efforts of Circle, and the new Ripple USD. In further fomenting the momentum, Ras Al Khaimah RAK DAO has introduced a new $2 million fund to help blockchain startups and blockchain builders. The project is an indicator of the desire that the emirate has to establish itself as a regional center of compliant Web3 development and innovation of digital assets.

India, on the contrary, is redoubling its effort on central bank digital currency. The Reserve Bank of India also encouraged policymakers globally to adopt CBDCs as opposed to privately issued stablecoins and cautioned that the privately issued tokens have the potential to increase financial instability in times of market stress.

CBDCs are said to offer the advantages of digital efficiency and programmability without injecting issuer credit risk into the system by the RBI. Officials claim that sovereign digital money will have more control over the transmission of monetary policy, financial inclusion, and systemic stability.

The Economic Survey of India 2025-2026 also implies that formal regulation of stablecoins is soon to come, which can be viewed as some stricter regulation rather than an acceptance. 

One of the most important policy changes of the week was made by China, which would allow banks to pay interest on digital yuan wallets as of January 1, 2026. This action literally comprises changing the e-CNY into a deposit-like, digital currency.

The digital yuan is also broadening its cross-border payment functions by the People’s Bank of China, which enhances its position in settlement at the international trade. In the meantime, the RMB International Operations Center in Shanghai is developing blockchain-based infrastructure on which international transactions in yuan can be conducted.

In an unexpected twist, on January 2, the Crypto mining and exchanges were legalized in Turkmenistan. The new framework will enable all non-residents to mine cryptocurrencies, has mining pools, and obligates licensed exchanges to adhere to KYC and AML standards. Though crypto will not be a legal tender, the law offers much-needed regulatory clarity.

Turkmenistan seems to be after the footsteps of Kazakhstan and is using the excess volume of energy to earn revenue through mining and not to depend solely on natural gas sales. The relocation makes the country a new entrant in the emerging crypto mining region in Central Asia.

The trend is evident in this week. The UAE is constructing a controlled, multi-issuer stablecoin economy. China and India are strengthening sovereign digital monetary policies. Turkmenistan is making itself accessible to controlled crypto infrastructure. Regulators are not standing on the fence anymore as adoption is getting faster. The choice between privately issued stablecoins or state-controlled digital currencies is defining the transformation of the global financial system.

420 +