India Announces ARC: A Rupee-Pegged Digital Asset Launching on Polygon in 2025

• What Is ARC, and How Does It Work?
• Why Polygon Was Chosen for ARC’s Infrastructure
• ARC’s Strategic Role in India’s Financial Ecosystem
• Challenges and Opportunities Ahead
• FAQs About India’s ARC Digital Rupee

India is making waves in the Web3 space with its ambitious ARC (Asset Reserve Certificate) project—a digital rupee pegged 1:1 to the Indian Rupee (INR) and set to launch on Polygon in 2025. This two-tiered system, developed in collaboration with Polygon and Anq, aligns with the Reserve Bank of India (RBI) and aims to revolutionize digital finance while supporting the country’s economic growth. Here’s everything you need to know about this groundbreaking initiative.

What Is ARC, and How Does It Work?

ARC is India’s answer to the growing demand for regulated, rupee-backed digital assets. Unlike decentralized stablecoins, ARC operates under a dual-layer framework:

• Tier 1: The RBI issues a central bank digital currency (CBDC) as the foundational layer.
• Tier 2: Private, regulated entities mint ARC tokens, which are fully backed by INR reserves, government T-Bills, and bank deposits.

This structure ensures stability while enabling programmable features like tokenization and compliance with KYC/AML rules. Think of it as India’s version of a CBDC with extra DeFi-friendly flexibility.

Why Polygon Was Chosen for ARC’s Infrastructure

Polygon’s blockchain emerged as the go-to platform for ARC due to its scalability, low fees, and customizable sovereignty features. As Solid Intel noted in a November 2025 tweet:

"INTEL: India plans to launch ARC, a rupee-pegged digital asset, in early 2026, built by Polygon and Anq with a two-tier, RBI-aligned system and restricted minting and swaps."

Polygon’s tech stack allows the Indian government to balance transparency with regulatory control—transactions occur on-chain, but access can be restricted via whitelists and compliance checks.

ARC’s Strategic Role in India’s Financial Ecosystem

This project marks a sharp pivot from India’s earlier skepticism toward crypto. By anchoring ARC to the rupee and state-backed securities, the government aims to:

• Strengthen INR liquidity in Web3 markets.
• Divert demand away from dollar-pegged stablecoins like USDT and USDC.
• Channel investments into India’s sovereign debt.

However, questions remain about public accessibility and global adoption, especially given the dominance of USD-linked assets in crypto trading. (For context, USD-backed stablecoins account for over 90% of trading volume on exchanges like BTCC and Binance, per CoinMarketCap data.)

Challenges and Opportunities Ahead

While ARC’s launch is a milestone, its success hinges on:

• Regulatory clarity: Will retail users face restrictions?
• Global uptake: Can ARC compete with established stablecoins?
• Tech execution: Polygon’s infrastructure must handle RBI-scale demand.

If executed well, ARC could set a template for other emerging economies exploring sovereign digital assets. As a BTCC market analyst noted, "This is less about crypto and more about modernizing monetary policy—with blockchain as the tool."