India is progressing towards the launch of its regulated, rupee-pegged digital asset, the Asset Reserve Certificate (ARC), scheduled for early 2026. Developed in partnership with Polygon and fintech firm Anq, the ARC is a debt-backed token pegged 1:1 to the Indian rupee and fully backed by Indian government securities and Treasury Bills.
The primary goal of the ARC is to provide a strategic alternative to dollar-backed stablecoins in the Indian market, aiming to retain liquidity within India's domestic financial system. Policymakers have expressed concerns about capital flowing into USD-denominated stablecoins, which could weaken the rupee and hinder monetary control.
The ARC will function within a dual-layer digital payments framework, operating alongside the Reserve Bank of India's Central Bank Digital Currency (CBDC). The first tier involves the RBI's CBDC for official settlement, while the second tier comprises the ARC token layer, enabling programmable payments, automated transactions, remittances, and digital financial services.
Notably, the minting of new ARC tokens will be restricted to corporate accounts only, preventing individual speculation and ensuring adherence to India's foreign exchange regulations. This design promotes price stability, aligns with national monetary policy, and enhances demand for government debt.
If launched as planned in Q1 2026, the ARC could become a key component of India's digital asset ecosystem, supporting fintech development, strengthening the rupee's digital footprint, and offering a compliant digital tool for businesses across the country.
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