India’s ARC Token: A Debt-Backed Stablecoin on the Horizon
What Is ARC? India’s Upcoming Rupee-Backed Stablecoin
India is preparing to launch the Asset Reserve Certificate (ARC), a fully collateralized stablecoin pegged 1:1 to the Indian rupee (INR). Sources told CoinDesk the token could debut as early as January 2026. Polygon and local fintech Anq are building it. Unlike USDC or Tether, ARC will be minted only when issuers lock INR cash, fixed deposits, or government securities. This design keeps liquidity inside India and counters the growing threat of dollar-stablecoin outflows.
Why India Needs ARC Now
Dollar-pegged stablecoins are exploding. Standard Chartered warns they could pull up to $1 trillion from emerging-market banks in the next three years. Many savers prefer 5%+ yields on USDC over local deposits. As a result, capital flees India. ARC fights back. It offers a rupee-denominated alternative that still works on-chain for payments, remittances, and tokenized assets. Moreover, it creates new demand for Indian government bonds.
How ARC Works, Simple and Compliant
- Only licensed businesses can mint or redeem ARC.
- Every token is backed 1:1 by INR reserves in regulated accounts.
- Uniswap v4 hooks restrict trading to whitelisted addresses.
- Users stay within India’s Liberalised Remittance Scheme (LRS) limits.
Because the token runs on Polygon, transactions are fast and cheap. Meanwhile, the backing stays fully in rupees.
A Two-Tier Digital Rupee System
India already has the RBI’s e-rupee CBDC. ARC complements it. The CBDC handles sovereign settlement. In contrast, ARC lets the private sector innovate with programmable money. Together, they form a powerful two-tier system that promotes rupee internationalization without losing control.
Bigger Picture for Emerging Markets
Many countries watch closely
India’s move could inspire similar sovereign stablecoins in Brazil, Nigeria, Indonesia, and beyond. After all, every nation wants to protect deposits and boost local bond demand. For global investors, ARC opens a new door to tokenized Indian debt – all while staying compliant.
Bottom Line
January 2026 could mark the start of India’s on-chain rupee era. ARC isn’t just another stablecoin. Instead, it’s a strategic tool to keep capital at home, modernize payments, and lead the next wave of real-world assets.