Polygon Labs and fintech firm Anq have announced the development of the Asset Reserve Certificate (ARC), a planned INR-pegged Indiastablecoin that is currently under development and awaits regulatory clearance. Planned to be backed 1:1 by Government of India securities (G-Secs), this new rupee-backed stablecoin aims to be a regulated, non-speculative digital asset intended to complement the Reserve Bank of India’s (RBI) e-Rupee CBDC pilot, positioning India in a global market that exceeds $150 billion.
ARC: Sovereign Backing and G-Sec Collateral Design
The upcoming India stablecoin, ARC token, is being built on the Polygon blockchain, leveraging its scalability for potential mass adoption and remittances. Its core feature is the 1:1 backing by Government of India securities, which are debt instruments issued by the government
Sandeep Nailwal, Co-Founder of Polygon, confirmed the token’s compliance-focused design. Nailwal stated that the project “will be fully backed by Government of India securities & designed as a regulated, non-speculative digital token.” This sovereign backing is intended to build trust and mitigate dependency on foreign currency stablecoins.
The project’s structure is designed to address policy concerns from the Reserve Bank of India (RBI). An RBI Deputy Governor, speaking generally on stablecoins, previously noted that “stablecoins risk policy sovereignty.” The sovereign backing of ARC suggests an attempt to align the stablecoin with the nation’s financial stability goals.
ARC Implications for India’s Digital Finance Goals
The ARC stablecoin is expected to boost institutional trust in Indian crypto and accelerate Web3 and DeFi growth. Sahil Gupta, a developer at CoinDCX, suggested that if the project is successful, ARC could “bring INR payments fully on-chain.”
The India stablecoin targets high-value use cases like remittances, which exceed $100 billion annually, with the goal of retaining that value domestically and reducing transaction costs. The focus on sovereign backing and regulation positions India to compete as a regional digital finance hub.
The ARC project remains under development and its timeline is subject to regulatory approval. Official non-objection from the RBI remains a crucial next step for the token to enter the market.
Chain Street’s Take
ARC represents India’s most calculated step toward integrating sovereign finance with blockchain infrastructure. By anchoring its value to government securities instead of fiat reserves, the project challenges the dominance of USD-backed stablecoins while aligning with RBI oversight. If executed, it could redefine how national debt instruments interact with digital markets, turning compliance itself into a competitive advantage.
