India launches rupee-pegged digital asset Arc with Polygon and Anq

India plans rupee-backed Arc token with Polygon, Anq in 2026.

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 linked 1:1 to the rupee, has been developed by Polygon and fintech firm 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), forming a dual-layer digital payments architecture, according to the sources.

Digital assets in India robust

The digital asset aims to retain liquidity within India’s domestic financial system. Policymakers have raised concerns 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 securities (G-Secs) and Treasury Bills, ensuring price stability and alignment with national monetary policy objectives while enhancing demand for government debt, according to the project details.

The initiative operates as a two-tiered framework. Tier 1 consists of the RBI’s CBDC, which serves as the official settlement infrastructure. Tier 2 comprises the ARC token layer, enabling programmable payments, automated transactions, remittances, and digital financial services.

Only corporate accounts will be permitted to generate new ARC token supply, not individuals. This restriction is designed to ensure compliance with India’s foreign exchange regulations and prevent consumer-level speculative activity, the sources said.

The project represents India’s effort to digitize financial infrastructure while maintaining regulatory oversight. By creating a domestic alternative to US dollar stablecoins, India seeks 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 a significant component of India’s digital asset ecosystem, supporting fintech development and strengthening the rupee’s digital presence, the sources said.