• ARC tokens will be minted 1:1 against Indian rupee assets like fixed deposits and government securities to ensure full transparency and compliance.

• Designed to complement the RBI’s digital rupee, ARC enables programmable payments and smart contracts for enterprises.

• With controlled minting limited to businesses, ARC aims to counter potential $1 trillion deposit outflows from emerging markets due to global stablecoin adoption, per Standard Chartered analysis.

Discover India’s ARC token: a fully backed rupee stablecoin launching in 2026 to protect liquidity and boost fintech. Learn how it integrates with CBDC for secure payments—explore now!

What is the Asset Reserve Certificate (ARC) in India?

The Asset Reserve Certificate (ARC) is a fully collateralized digital token pegged to the Indian rupee, developed by Polygon and Anq for a projected Q1 2026 rollout. It ensures each token is backed by verified cash equivalents like fixed deposits or government securities, promoting transparency in India’s financial ecosystem. This initiative addresses concerns over capital flight to foreign stablecoins while enabling regulated digital innovation.

How does ARC integrate with the RBI’s CBDC?

The ARC operates as a private-sector layer on top of the Reserve Bank of India’s Central Bank Digital Currency (CBDC), which handles core monetary settlements. According to insights from financial regulatory discussions, ARC facilitates advanced features such as programmable remittances and smart-contract executions that the CBDC infrastructure supports but does not natively provide. This symbiotic model preserves central bank oversight while empowering fintech firms to build enterprise solutions.

For instance, businesses could use ARC for automated supply-chain payments, where tokens are released upon delivery verification via blockchain. Experts from the fintech sector, including Polygon executives, emphasize that this integration strengthens India’s digital payment framework without duplicating CBDC functions. Data from the RBI indicates that CBDC pilots have already processed millions in transactions, laying a robust foundation for such extensions.

A fully backed, rupee-pegged ARC token will be minted only against verified cash assets, ensuring transparency and offering stablecoin-like utility within India’s regulated system.

Key Highlights

• ARC will be a fully backed, rupee-pegged digital asset designed to prevent liquidity from moving into foreign dollar stablecoins.
• Works alongside the RBI’s CBDC, enabling programmable payments, regulated smart-contract systems, and enterprise-grade settlement.
• Controlled minting and whitelisted trading ensure compliance with India’s financial rules while supporting domestic fintech innovation.

India is advancing toward the introduction of the Asset Reserve Certificate (ARC), a collateralized digital asset aimed at bolstering the nation’s financial stability. This rupee-linked token, backed entirely by domestic reserves, seeks to mitigate risks from international stablecoin proliferation while enhancing programmable finance options.

Why is India Developing the ARC Token Now?

India’s pursuit of the ARC stems from escalating concerns over global stablecoin dynamics, particularly following the U.S. GENIUS Stablecoin Act under the Trump administration. This legislation has legitimized dollar-pegged assets, prompting fears of capital outflows from emerging economies. A Standard Chartered report projects up to $1 trillion in deposit shifts from banks in these markets over the next three years, underscoring the urgency for countermeasures like ARC.

By mandating full backing with Indian rupee instruments, ARC confines liquidity within national borders, supporting local economic activity. Financial analysts note that this approach aligns with India’s strategy to maintain rupee partial convertibility, avoiding the pitfalls seen in other jurisdictions where unregulated stablecoins led to reserve mismanagement.

How Will ARC Ensure Regulatory Compliance?

Minting ARC tokens will be restricted to verified business entities, excluding retail participants to align with the Liberalised Remittance Scheme (LRS). This framework caps individual foreign currency transactions, preventing unauthorized capital flight. Insiders from regulatory circles highlight that whitelisted trading on platforms like Uniswap v4 hooks will further enforce compliance, with all activities monitored under RBI guidelines.

Polygon’s involvement brings Ethereum’s scalable infrastructure, ensuring secure, efficient transactions. Anq, the Indian fintech partner, contributes local expertise in compliance tech. Quote from a Polygon spokesperson: “ARC represents a balanced evolution of blockchain in regulated environments, prioritizing stability and innovation.”

Frequently Asked Questions

What makes ARC different from existing stablecoins?

Unlike many dollar-pegged stablecoins, ARC is fully backed by Indian rupee assets held in regulated institutions, with minting tied directly to verified deposits. This 1:1 peg and transparency measures distinguish it, reducing risks of depegging or opacity, as evidenced by past incidents with global issuers. It focuses on domestic utility rather than international speculation.

Can individuals use ARC for everyday transactions?

ARC is primarily designed for enterprise and business applications, such as B2B payments and supply-chain finance, rather than retail use. While it integrates with the RBI’s CBDC for broader settlements, individual access to minting is prohibited to maintain regulatory controls. This structure supports seamless, voice-activated queries like “How does ARC enhance business payments in India?” by enabling efficient, programmable transfers.

Key Takeaways

• Full Backing and Peg: Each ARC token mirrors the rupee value through cash reserves, fostering trust in India’s digital asset space.
• CBDC Synergy: ARC builds on RBI’s infrastructure for smart features, driving fintech growth without central bank competition.
• Compliance Focus: Business-only minting and whitelisted trading safeguard against outflows, positioning India as a leader in regulated crypto.

Conclusion

The Asset Reserve Certificate (ARC) marks a pivotal step in India’s digital finance landscape, integrating rupee-pegged stability with blockchain efficiency to counter global stablecoin pressures. By complementing the RBI’s CBDC and enforcing strict controls, ARC not only protects domestic liquidity but also paves the way for innovative enterprise solutions. As the 2026 launch approaches, stakeholders should monitor regulatory developments to leverage this forward-thinking asset in shaping a resilient financial future.

Also Read: Revolut–Polygon Integration Accelerates On-Chain Payments

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The tentative Q1 2026 timeline for ARC involves rigorous testing and approvals, potentially setting a precedent for other emerging markets balancing innovation and sovereignty. With partnerships like Polygon and Anq driving technical robustness, ARC could enhance demand for Indian government securities while streamlining cross-border yet regulated flows within approved limits.