India’s Asset Reserve Certificate (ARC), a fully collateralized stablecoin digital asset developed by Ethereum scaling and infrastructure development giant Polygon and India-based fintech company Anq, could go live in the first quarter of 2026, sources familiar with the matter told CoinDesk.
Sources said each ARC token will trade 1:1 with the Indian rupee and will only be issued when issuers acquire cash or cash equivalents such as fixed deposits, government securities or cash balances. This setup ensures transparency, security and compliance, filling gaps often seen in stablecoins or speculative tokens backed by foreign funds.
Essentially, the ARC is designed to prevent liquidity outflows into dollar-backed stablecoins, maintaining liquidity and innovation within the Indian national economy while simultaneously fostering demand for public debt instruments.
The proposed digital token will complement the Reserve Bank of India’s (RBI) Central Bank Digital Currency (CBDC) by serving as a regulated, privately-developed interaction layer.
Under this two-tier framework, the RBI’s central bank digital currency remains the ultimate settlement level, ensuring monetary sovereignty and security. At the same time, the private sector operates the platform that promotes responsible innovation in payment solutions, programmable transactions and remittance systems in a regulatory compliant environment.
This framework ensures strong control over the monetary base by maintaining central oversight, all within the confines of the Indian financial and regulatory system.
Sources said the ARC would align with partial convertibility of the rupee: INR is fully convertible for current account transactions such as trade, business payments and remittances, but remains limited to capital account transactions to protect economic stability.
The stable digital token will achieve this by enabling payments for commercial transactions without requiring full convertibility. Importantly, only professional accounts will be allowed to mint ARC tokens, ensuring compliance with the Liberalized Remittance Scheme (LRS) rules governing individual foreign exchange transactions.
Additionally, the ARC ecosystem will use Uniswap v4 protocol hooks to limit token swaps exclusively to whitelisted addresses, thereby reinforcing controlled access and regulatory compliance.
India’s quest for a sovereign stablecoin comes amid growing concerns about capital outflows from emerging markets into dollar-backed stablecoins, following the Trump administration’s pro-crypto regulatory moves.
Notably, the landmark GENIUS Stablecoin Act legalized dollar-backed stablecoins, raising alarms about significant liquidity shifts out of emerging economies.
Standard Chartered recently warned that emerging market banks could face deposit outflows of up to $1 trillion over the next three years as savers increasingly turn to dollar-backed stablecoins.
