India is moving closer to launching its own regulated, rupee-pegged digital asset in early 2026. The Asset Reserve Certificate (ARC), a debt-backed, 1:1 rupee-linked token developed by Polygon and fintech firm Anq, is being positioned as a strategic counter to the dominance of dollar-backed stablecoins in the Indian market.
According to sources familiar with the project, the ARC will function alongside the Reserve Bank of India’s (RBI) Central Bank Digital Currency (CBDC), forming a dual-layer digital payments architecture.
A Homegrown Alternative to Dollar Stablecoins
The primary goal of the ARC is to keep liquidity within India’s domestic financial system. Policymakers have long expressed concern that Indian capital is increasingly flowing into USD-denominated stablecoins, which can weaken the rupee’s position and complicate monetary control.
The ARC aims to solve this by offering a regulated, non-speculative digital asset, fully backed by Indian government securities (G-Secs) and Treasury Bills. This ensures both price stability and alignment with national monetary policy objectives, while also enhancing demand for government debt.
How the ARC Will Operate
The project is being built as a two-tiered framework:
- Tier 1: The RBI’s CBDC, which acts as the official settlement infrastructure.
- Tier 2: The ARC token layer, enabling programmable payments, automated transactions, remittances, and digital financial services.
Crucially, ARC tokens will not be freely minted. Only corporate accounts, not individuals, will be allowed to generate new supply, ensuring the system remains compliant with India’s strict foreign exchange rules and preventing consumer-level speculative abuse.
Strategic Alignment With India’s Digital Policy
The ARC initiative reflects India’s broader push toward digitizing financial rails without compromising regulatory oversight. By creating a domestic alternative to US dollar stablecoins, India gains tighter control over liquidity, capital flows, and digital payments innovation.
If launched as planned in Q1 2026, the ARC could become a major component of India’s digital asset ecosystem, supporting fintech development, strengthening the rupee’s digital presence, and offering a compliant digital instrument for businesses across the country.
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