India Plans ARC Rollout in Early 2026 to Counter Dollar-Backed Stablecoins
India is preparing to introduce a new stable digital asset known as the Asset Reserve Certificate (ARC) in the first quarter of 2026, as the country steps up efforts to protect domestic liquidity from the growing influence of foreign-backed stablecoins according to .
The project is being developed in collaboration with blockchain network Polygon and Indian fintech firm Anq. ARC will be pegged 1:1 to the Indian rupee and backed by sovereign financial instruments, including government securities, treasury bills, and other cash-equivalent reserves.
This structure is expected to offer a more conservative and transparent alternative to offshore stablecoins that currently dominate digital asset markets.
Issuance And Structure
Unlike public stablecoins that can be minted by anyone, ARC will reportedly be issued only through authorized corporate and institutional accounts. This approach aligns with India’s foreign platform framework and its partially convertible currency regime, assisting regulators limit capital flight while maintaining tighter control over who can access and create the asset.
ARC is also expected to function alongside the Reserve Bank of India’s central bank digital currency, rather than replace it. The digital rupee would remain the primary settlement layer, while ARC would operate as a programmable, business-facing token that enables use cases such as on-chain payments, treasury management, and enterprise transactions. This two-tier structure allows India to support blockchain-based financial activity without giving up control over monetary policy.
To ensure regulatory compliance, the system is designed with built-in restrictions that limit transfers and swaps to whitelisted addresses. These controls are expected to be embedded at the protocol level, enabling authorities to monitor activity and prevent unauthorized trading or misuse.
India’s underlying objective is to counter the rapid adoption of dollar-pegged stablecoins, which regulators view as a potential risk to domestic financial stability. By creating a sovereign-backed alternative tied to the rupee and supported by government debt, ARC could assist keep liquidity within the Indian financial system while simultaneously increasing demand for government securities.
However, details around custody arrangements, auditing standards, and the final regulatory framework have not yet been made public. The proposed ahead-2026 timeline also remains tentative, pending approvals from the Reserve Bank of India and other relevant authorities.
If implemented as planned, ARC would mark one of the most ambitious attempts by a major emerging economy to create a state-aligned, asset-backed digital token. The launch could set a precedent for how other countries balance on-chain innovation with domestic monetary control in an increasingly stablecoin-driven global market.
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