India is laying the groundwork for a rupee-pegged digital asset that could reshape how domestic liquidity circulates inside the country.
According to people involved in the effort, the Asset Reserve Certificate, or ARC, is scheduled for an early-2026 debut and has been developed through a collaboration between Polygon and fintech firm Anq.
Unlike privately issued stablecoins that dominate many local trading routes, the ARC is structured as a debt-backed instrument tied to the rupee at a one-to-one exchange ratio. Its backing Indian government securities and Treasury Bill, anchors the token to regulated financial assets rather than external currencies such as the US dollar.
Why a domestic token matters
Indian officials have been increasingly vocal about capital outflows tied to USD-denominated stablecoins. When traders shift money into those assets, the liquidity often leaves India’s banking channels, creating pressure on the rupee and complicating monetary policy. A rupee-based alternative gives the government a way to keep digital payments innovation inside the domestic system while supporting demand for government debt.
The ARC sits beside the RBI’s own Central Bank Digital Currency. The two-tier model positions the CBDC as the settlement foundation, while the ARC operates as a programmable layer for automated payments, remittances, and financial services. This layered structure resembles the separation between wholesale and retail settlement rails already used in India’s banking sector.
Controlled issuance to support regulation
Only corporate accounts will be allowed to mint new ARC supply. That restriction aligns the project with India’s foreign-exchange rules and discourages consumer speculation, which has been a persistent concern in retail crypto markets.
By keeping token creation in the hands of regulated institutions, policymakers can supervise liquidity flows without suppressing innovation.
A strategic step in India's digital finance playbook
If the rollout proceeds on schedule in early 2026, the ARC could become an important piece of India’s digital asset landscape. The project blends private-sector engineering from Polygon with regulatory oversight shaped by India’s monetary authorities, creating a hybrid model that supports fintech growth while reinforcing the rupee’s presence in digital markets.
India’s approach differs from the open stablecoin markets visible elsewhere. Instead of competing with foreign tokens on their terms, the country is building infrastructure that fits its own policy environment, with an eye on capital stability and long-term digital adoption.
Oleksii Shumak
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