India to Launch Rupee-Backed ARC Stablecoin in 2026

Key Points:* India to introduce ARC stablecoin, backed by rupee, in 2026.

• Targets reduced outflows to USD-backed stablecoins.
• Developed by Polygon and Anq, supporting domestic debt needs. India plans to introduce ARC, a stable asset tied 1:1 to the rupee, in early 2026, leveraging blockchain technology from Polygon and fintech firm Anq.

This launch addresses India’s capital flow concerns, potentially impacting USD stablecoins and enhancing domestic financial stability by integrating with the Reserve Bank of India’s digital currency.

ARC Stablecoin to Rival USD Alternatives in India

ARC is designed as a stable digital instrument linked directly to the rupee, representing a shift in India’s approach to digital assets. The digital currency will be rolled out through corporate accounts, ensuring compliance and financial stability by utilizing a two-tier structure. The Reserve Bank of India will oversee ARC’s operations via its Central Bank Digital Currency framework, emphasizing financial autonomy.

The launch is expected to affect currency flows, with a likely reduction in capital outflows to USD stablecoins. By encouraging the utilization of INR-backed stablecoins, the domestic market may see increased demand for government bonds and treasuries. The project aligns with India’s financial strategies, addressing liquidity needs using local resources.

Market responses indicate cautious optimism. Sandeep Nailwal, Polygon’s co-founder, expressed confidence about India’s digital currency initiatives, stating that the country’s financial landscape is poised for innovation.

The Government has yet to release detailed statements, but project documents suggest compatibility with RBI policies.

“This is not another crypto coin. It’s a sovereign-backed digital instrument… The idea is to turn tokenization into a tool for strengthening India’s balance sheet, not someone else’s.” – ARC Project Documentation

Potential Economic Impact and Regulatory Changes

Did you know? The ARC stablecoin seeks to mimic initiatives such as China’s Digital Yuan, illustrating India’s strategy to bolster financial sovereignty through blockchain technology.

Recent Ethereum data reveals the following: the current price stands at $3,013.48, with a market cap worth $363.72 billion. As an integral component of Polygon’s Layer 2 infrastructure, Ethereum may indirectly be affected by ARC’s execution. Notable price shifts include a 15% weekly drop and a 32.91% decrease over 60 days, as reported by CoinMarketCap on November 20, 2025.

Ethereum(ETH), daily chart, screenshot on CoinMarketCap at 06:48 UTC on November 20, 2025. Source: CoinMarketCap Insights from the Coincu research team suggest that if successful, the ARC introduction could lead to regulatory adjustments compatible with international blockchain standards. The decision to back ARC with national securities might enhance investor trust, potentially stabilizing the domestic economy and strengthening India’s digital asset infrastructure.