India’s Asset Reserve Certificate (ARC), a fully collateralized stable digital asset developed by Ethereum scaling and infrastructure development giant Polygon and India-based fintech firm Anq, could go live in the first quarter of 2026, sources familiar with the matter told CoinDesk.
Sources said each ARC token will be traded 1:1 with the Indian rupee and will be minted only when issuers acquire cash or cash equivalents such as fixed deposits, government securities or cash balances. This setup ensures transparency, security and compliance, and addresses shortcomings often seen in foreign-backed stablecoins or speculative tokens.
Essentially, ARC is designed to prevent the outflow of liquidity into dollar-backed stablecoins, maintaining liquidity and innovation within India’s domestic economy while also fueling demand for public debt instruments.
The proposed digital token will complement the central bank digital currency (CBDC) of the Reserve Bank of India (RBI) by serving as a regulated interaction layer developed by the private sector.
In this two-tier framework, the RBI central bank digital currency remains the ultimate settlement layer, safeguarding monetary sovereignty and security. At the same time, the private sector operates the platform that fosters responsible innovation in payment solutions, programmable transactions and remittance systems within a regulatory-compliant environment.
This framework ensures strong control over the monetary base by maintaining central supervision, all within the confines of India’s financial and regulatory system.
Sources said the ARC will be aligned with partial convertibility of the rupee – INR is fully convertible for current account transactions like trade, trade payments and remittances, but remains restricted for capital account transactions to protect economic stability.
The stable digital token will do so by allowing payments for commercial transactions without requiring full convertibility. Importantly, only merchant accounts will be authorized 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 bindings to restrict token swaps exclusively to whitelisted addresses, reinforcing controlled access and regulatory compliance.
India’s pursuit of 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 measures.
In particular, the landmark GENIUS Stablecoin Act legalized dollar-backed stablecoins, raising alarms about significant liquidity siphoning from 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.
