India is preparing to introduce a new class of digital assets aimed at protecting its financial system from capital flight while giving regulated fintech firms room to innovate. The Asset Reserve Certificate, or ARC, is expected to debut as early as the first quarter of 2026, according to people close to the project. Developed by Polygon in partnership with Indian fintech company Anq, ARC represents one of the most ambitious attempts yet by India to keep liquidity anchored within its borders as global stablecoin adoption accelerates.
ARC is designed as a rupee-pegged token backed entirely by verified cash assets. Each unit will be minted only when issuers provide equivalent value in fixed deposits, government securities, or other approved cash equivalents. Those familiar with the framework say this level of transparency is central to avoiding the reserve-related controversies that have surrounded some foreign stablecoin issuers. The goal is to offer the utility of a stablecoin while ensuring the backing remains within India’s financial oversight structure.
The push for ARC comes at a critical moment. Recent regulatory changes in the United States—including the GENIUS Stablecoin Act—have legitimised dollar-backed stablecoins in the world’s largest economy. Policymakers in emerging markets fear this shift could intensify the movement of local savings into digital dollars. Analysts at Standard Chartered have estimated that developing countries could lose as much as $1 trillion in bank deposits over the next three years as global access to dollar stablecoins increases. Indian authorities see ARC as a buffer against that scenario, ensuring that digital liquidity remains tied to the rupee rather than flowing outward.
ARC is not intended to replace India’s Central Bank Digital Currency. Instead, insiders describe it as a private-sector-built interaction layer that sits atop the RBI’s digital rupee infrastructure. The CBDC would continue to serve as the core settlement mechanism, while ARC would support more advanced, programmable functions such as automated payments, smart-contract-based enterprise systems, and tailored digital-payment workflows that the CBDC does not directly enable.
Strict controls are being built into the system to maintain India’s partial capital-control regime. Only corporate entities will be allowed to mint ARC tokens, keeping the process aligned with the country’s remittance and foreign-exchange rules. This approach positions ARC firmly as a tool for regulated business payments, supply-chain operations, and enterprise-grade settlement systems rather than a retail trading asset. Controlled trading mechanisms, including customised Uniswap v4 hooks, will further ensure compliance with domestic financial rules.
The rollout will depend on regulatory sign-offs, banking integrations, technical testing, and security audits. If approved, ARC could become a model for other developing economies seeking to embrace digital-asset innovation without compromising monetary sovereignty. With stablecoins increasingly shaping global financial influence, India hopes ARC will help safeguard the rupee while enabling the next generation of digital-payment infrastructure.
