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 trade 1:1 with the Indian rupee and will be minted only when issuers acquire cash or liquid assets 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, the ARC is designed to prevent liquidity outflows to dollar-backed stablecoins, keeping liquidity and innovation in India’s domestic economy while promoting 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 interaction layer developed by the private sector.
In this two-tier framework, RBI’s Central Bank Digital Currency remains the ultimate settlement layer that ensures 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 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 adjust to partial convertibility for rupees: the INR is fully convertible for current account transactions such as trade, business payments and remittances, but remains limited to capital account transactions to protect financial stability.
The stable digital token will do so by allowing payments for business transactions without requiring full convertibility. Importantly, only corporate accounts will be authorized to mint ARC tokens, ensuring compliance with Liberalized Remittance Scheme (LRS) rules for individual currency transactions.
In addition, ARC’s ecosystem will use Uniswap v4 protocol hooks to limit token swaps exclusively to whitelisted addresses, reinforcing controlled access and regulatory compliance.
India’s pursuit of a sovereign stablecoin comes amid growing concern over capital outflows from emerging markets to 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 of significant liquidity shifts away from emerging economies.
Standard Chartered recently warned that emerging markets banks could face deposit outflows of up to $1 trillion over the next three years as savers increasingly turn to dollar-backed stablecoins.
