India Preps Rupee Stablecoin to Counter Dollar Dominance

The Asset Reserve Certificate (ARC), a fully collateralized stablecoin developed by blockchain scaling network Polygon and Indian fintech firm Anq, is targeted for launch in Q1 2026.

Unlike the Reserve Bank of India's (RBI) digital rupee (CBDC), the ARC is not issued directly by the central bank. Instead, it operates on a "two-tier" framework. The private sector (Polygon/Anq) mints the tokens, but they must be backed 1:1 by "cash or cash equivalents," specifically government securities (G-Secs) and Treasury Bills.

Debt as Demand 

The structure serves a dual purpose: it offers a regulated on-chain settlement layer while creating a perpetual buyer for India's government debt.

"People aware of the proposal said this design could make it easier... for the government to borrow or raise funds domestically by creating sustained demand for its securities," reported The Times of India.

The Defensive Pivot 

The initiative comes as Indian regulators grow increasingly wary of capital flight into USD-denominated stablecoins. According to Binance, the USD stablecoin market has swelled to $300bn, up 60% in the last year.

Speaking at the Delhi School of Economics on Thursday, RBI Governor Sanjay Malhotra described private cryptocurrencies as a "huge risk" but distinguished between speculative assets and regulated payment layers.

"We are adopting a very cautious approach," Malhotra said. "But... we are promoting and experimenting with the CBDC... as an alternative for payments in our country.".

The ARC appears to be the compromise: a private-sector vehicle that plays by the central bank's strict capital control rules.