- India’s ARC stablecoin, being developed in partnership with Polygon and Anq, will launch in early 2026.
- Tokens will be minted only for business accounts with full collateral backing.
- The stablecoin will operate with the RBI CBDC to retain liquidity and enable faster payments.
India’s Asset Reserve Certificate (ARC) stablecoin, a fully backed rupee stablecoin set to debut in the first quarter of 2026, is being developed through a partnership between Ethereum scaling giant Polygon Labs and Bengaluru-based fintech firm Anq.
The stablecoin aims to modernise India’s payments landscape while keeping financial flows within the country and strengthening demand for government debt instruments.
ARC stablecoin and India’s central bank digital currency (CBDC)
The ARC stablecoin is designed to operate alongside India’s central bank digital currency (CBDC), providing a regulated private-sector layer while the RBI’s CBDC serves as the ultimate settlement instrument.
This two-tier framework allows the ARC to facilitate faster, cheaper payments and programmable transactions without undermining monetary sovereignty or regulatory oversight.
By integrating blockchain-based innovation with India-focused fintech knowledge, the project seeks to bridge the gap between traditional banking systems and decentralised technologies.
Fully collateralised and pegged 1:1 to the Indian rupee, the ARC will only be minted when sufficient reserves are held in cash, government securities, or fixed deposits.
ARC issuers will be authorised exclusively for business accounts, in line with the Liberalised Remittance Scheme (LRS) rules and partial convertibility guidelines.
Transactions will also be limited to whitelisted addresses through Uniswap v4 protocol hooks, ensuring that the stablecoin remains secure, compliant, and fully traceable within India’s financial ecosystem.
Keeping liquidity at home
One of the primary motivations behind the ARC is to curb capital outflows into dollar-backed stablecoins, which have gained traction in emerging markets following regulatory shifts in the United States.
Indian authorities have expressed concern that rising demand for global stablecoins like USDT and USDC could draw liquidity away from domestic markets, potentially destabilising local banks and slowing government borrowing.
By anchoring the ARC to the rupee and pairing it with robust compliance mechanisms, India seeks to retain financial innovation and liquidity within its borders while supporting demand for government debt.
The stablecoin also aims to address operational inefficiencies in existing payment systems. ARC transactions promise near-instant settlements, reducing reconciliation delays and lowering costs for businesses handling high transaction volumes.
If successful, the ARC stablecoin could help establish confidence in rupee-based digital assets, offering a local alternative to global stablecoins and reinforcing India’s position in the broader digital economy.
Strategic timing and market implications
The timing of the ARC’s rollout is strategic, coming as countries worldwide explore regulated stablecoins to accelerate cross-border payments and improve liquidity.
Also, by leveraging Polygon’s Ethereum infrastructure and Anq’s domestic expertise, India hopes to create a scalable, compliant platform that could integrate with existing systems such as UPI and Polygon CDK networks.
Experts in the local crypto community have already hailed the development as a transformative move that may reduce outflows of Indian capital during market surges and strengthen the country’s digital finance ecosystem.
However, the success of the Arc stablecoin will depend on adoption by banks, fintech firms, and regulators, as well as its ability to complement the RBI CBDC.
