India plans a rupee-backed Arc token with Polygon, Anq in 2026.
Summary
- India is set to launch a rupee-linked digital asset (Arc) in 2026, developed by Polygon and Anq.
- Arc aims to counter US dollar stablecoins and maintain liquidity in India, backed by government bonds.
- The system features a dual-tier architecture (RBI’s CBDC for settlement, Arc for programmable payments), limited to corporate accounts.
India is preparing to launch a regulated rupee-pegged digital asset in early 2026, according to sources familiar with the project.
The Asset Reserve Certificate (ARC), a debt-backed token pegged 1:1 to the rupee, was developed by Polygon and fintech company Anq. The digital asset is designed to counter the dominance of dollar-backed stablecoins in the Indian market, the sources said.
The ARC will operate alongside the Reserve Bank of India’s (RBI) Central Bank Digital Currency (CBDC) and form a two-tiered digital payments architecture. sources.
Digital assets in India robust
The digital asset aims to maintain liquidity within India’s domestic financial system. Policymakers have expressed concern that Indian capital is increasingly flowing into USD-denominated stablecoins, which could weaken the rupee’s position and complicate monetary control, the sources said.
The ARC will be fully backed by Indian government bonds (G-Secs) and treasury bills, ensuring price stability and alignment with national monetary policy objectives while increasing demand for government bonds, project details show.
The initiative functions as a two-tiered framework. Tier 1 consists of the RBI’s CBDC, which serves as the official settlement infrastructure. Tier 2 includes the ARC token layer, which enables programmable payments, automated transactions, money transfers and digital financial services.
Only corporate accounts are allowed to generate new ARC tokens, not individuals. This restriction is aimed at ensuring compliance with Indian currency regulations and preventing speculative activities at the consumer level, the sources said.
The project represents India’s efforts to digitalize its financial infrastructure while providing oversight. By creating a domestic alternative to US dollar stablecoins, India is aiming for tighter control over liquidity, capital flows and digital payments innovation, according to analysts.
If launched as planned in the first quarter of 2026, the ARC could become an important part of India’s digital asset ecosystem, supporting fintech development and strengthening the rupee’s digital presence, the sources said.
