New India Stablecoin ARC Rupee-Backed Token Nears

Alex Reeve November 7, 2025

2 min read

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.

Polygon Labs and Anq develop the Asset Reserve Certificate to serve as a fully regulated, Indian Rupee-pegged stablecoin.
The ARC token maintains a strict 1:1 collateralization utilizing Government of India securities to ensure absolute monetary stability.
The sovereign-backed structure challenges United States dollar dominance by keeping $100 billion in annual remittance liquidity within the domestic economy.

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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.”

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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.

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FAQ

Frequently Asked Questions

What is the ARC stablecoin?

The Asset Reserve Certificate is a regulated digital token pegged directly to the value of the Indian Rupee. Polygon Labs and fintech firm Anq engineered the stablecoin on blockchain infrastructure to facilitate high-speed domestic and international settlements. The product operates as a non-speculative digital asset fully collateralized by sovereign debt instruments.

Why does this matter for the Indian economy?

The token modernizes the domestic financial system by bringing high-value Rupee transactions permanently onto the blockchain. Targeting the $100 billion annual remittance market significantly reduces cross-border friction and excessive banking fees for Indian citizens. The launch positions the nation as a dominant regional hub for compliant decentralized finance infrastructure.

How will Polygon and Anq execute the launch?

The development team executes the launch by deploying the ARC smart contracts exclusively on the scalable Polygon network. Official deployment requires a formal non-objection clearance from the Reserve Bank of India to ensure strict regulatory compliance. The project timeline depends entirely on the central bank finalizing its digital asset oversight framework.

What are the risks or critiques?

The Reserve Bank of India historically views private stablecoins as a direct threat to national monetary sovereignty. Critics argue the central bank may reject the ARC proposal to eliminate competition for its official e-Rupee digital currency pilot. Maintaining a 1:1 peg with government securities introduces liquidity risks during periods of extreme market volatility.

What happens next?

Polygon Labs will likely initiate closed beta testing with regional institutional partners to verify the token settlement speeds. The Reserve Bank of India must issue clear guidance regarding the integration of privately issued stablecoins with the sovereign banking system. Success in India will establish a blueprint for other emerging markets to launch state-backed digital currencies.