What To Know:
- India is preparing to launch its fully collateralized ARC token in early 2026, aiming to offer a compliant, rupee-pegged alternative to offshore stablecoins.
- ARC will function as a business-focused, on-chain settlement layer alongside the RBI’s CBDC, with strict minting rules, capital-flow safeguards, and closed-loop wallet controls.
- The initiative comes amid global scrutiny of stablecoins, with regulators worldwide assessing risks from rising adoption and potential deposit outflows from traditional banking systems.
India’s planned Asset Reserve Certificate, a fully collateralized digital token developed by Polygon and domestic fintech firm Anq, is being prepared for a potential rollout in the first quarter of 2026, according to people familiar with the discussions. The project, framed as a regulated alternative to foreign-backed stablecoins, is moving through internal development milestones while regulators assess its role in the country’s evolving digital finance landscape.
India’s Stablecoin ARC To be Launched Early 2026
Sources said the ARC token is designed to maintain a strict 1:1 peg with the Indian rupee. Minting will only occur once issuers secure cash or cash-equivalent reserves such as fixed deposits, government securities, or verified cash balances. The structure will include ARC within existing financial norms rather than speculative crypto markets. It also anchors ARC to instruments that reflect India’s sovereign credit quality and long-standing liquidity patterns.
Officials and industry developers expect the token to reduce the appeal of offshore stablecoins, which have seen accelerating demand across several emerging markets. ARC is meant to retain liquidity within India’s payment and financial ecosystem by providing an asset suited for domestic business transactions, programmable settlement layers, and compliant on-chain financial tools.
The token will operate alongside the Reserve Bank of India’s Central Bank Digital Currency. In this proposed framework, the CBDC remains the ultimate settlement foundation. ARC functions as an industry-built interaction layer for businesses seeking digital payment solutions and on-chain financial operations. The dual-tier structure gives the central bank control over monetary stability while allowing private entities to innovate within clear boundaries.
Sources involved with the design said the ARC token will align with India’s partial capital convertibility regime. The rupee is fully convertible for current account transactions, including payments for trade, services, and remittances. Capital account movements face stricter oversight to preserve macroeconomic stability. ARC’s model reflects these rules by enabling on-chain business payments without opening pathways to unrestricted capital flows.
Only business accounts will be permitted to mint new ARC tokens, a requirement tied to Liberalised Remittance Scheme rules for individuals. The ecosystem will also apply Uniswap v4 protocol hooks to restrict swaps to pre-approved wallets, creating a closed environment that aligns with existing compliance systems.
The timing of the project coincides with global debates on stablecoin regulation and their impact on national financial systems. India’s policymakers have closely monitored rising capital outflows from emerging markets into dollar-backed stablecoins. Concerns got serious after the United States enacted the GENIUS Stablecoin Act, which granted legal clarity to dollar-focused digital assets.
Several jurisdictions already support their own regulated stablecoins, including Singapore, Japan, the UAE, Bahrain, the European Union and the United States. The expansion has pushed central banks and financial regulators to evaluate how large these markets could grow and what risks they pose.
In Europe, De Nederlandsche Bank President Olaf Sleijpen recenlty warned that stablecoins could become systemically significant if adoption continues at its current pace. He noted that rapid growth in dollar-based tokens could introduce vulnerabilities to the region’s financial structure.
South Korea is moving in a different direction. The country’s Financial Services Commission is considering a proposal to allow major technology companies to issue won-pegged stablecoins. People familiar with the discussions told local media that the plan has raised concerns among some financial-sector insiders, who fear an uneven playing field between traditional banks and large technology firms. They expect a competitive phase to develop quickly if approvals are granted.
Also Read: Justin Sun Addresses USDJ Shutdown as the TRON Stablecoin Retires
Note: This material has not been formally verified by any government officials or and is based on information from sources familiar with the matter.
