NEW DELHI — India is gearing up to introduce its very own national stablecoin, marking a major step in its cautious but strategic embrace of digital assets. The new token, called the Asset Reserve Certificate (ARC), will be fully pegged to the Indian rupee (INR) and backed by government bonds, signaling the country’s intent to modernize its payment infrastructure without surrendering its financial sovereignty.
Developed in partnership with Polygon and fintech firm Anq, the ARC stablecoin is part of New Delhi’s broader strategy to digitize the economy while maintaining tight regulatory control.
Why Stablecoins Appeal to India
Despite India’s traditionally conservative stance toward cryptocurrencies, the Reserve Bank of India (RBI) is beginning to explore ways to use blockchain innovation in a state-supervised framework. While Bitcoin and other “classic” cryptos remain heavily taxed — up to 30% — and tightly regulated, stablecoins are seen as a middle ground.
Unlike speculative crypto assets, ARC would serve as a digital representation of the rupee, offering transparency, faster transactions, and reduced fraud — all without undermining monetary stability. The government could also leverage blockchain’s traceability to improve oversight of the financial system and curb tax evasion.
As Galvin Meta, a crypto analyst, highlighted on X (formerly Twitter):
“India launches ARC Token, the first rupee-backed stablecoin supported by the government. Secured by sovereign bonds, it aims to modernize payments and strengthen the value of the digital rupee.”
How the ARC Stablecoin Works
Each ARC token will be backed 1:1 by Indian government bonds, ensuring its value remains tightly linked to the rupee. This mechanism offers the stability and trust necessary for large-scale adoption — while avoiding the volatility that plagues other cryptocurrencies.
The token also represents a strategic defense against the global dominance of dollar-based stablecoins. By issuing a rupee-backed digital currency, India can maintain control over capital flows and prevent domestic funds from migrating toward U.S.-pegged assets.
This structure not only enhances the efficiency of digital payments — faster, cheaper, and more secure — but also reinforces monetary sovereignty, a key concern for Indian regulators wary of foreign influence in the financial sector.
Following China’s Lead — but on Its Own Terms
India’s move mirrors, to some extent, China’s successful rollout of the e-Yuan, a digital currency tightly integrated into the country’s payment system. New Delhi, however, appears to favor a more open and hybrid approach.
Since 2022, India has already been experimenting with the e-Rupee, a central bank digital currency (CBDC) aimed at improving financial inclusion. The introduction of ARC would complement that initiative — serving as a bridge between state-backed money and private blockchain innovation.
While the government is discouraging the use of unregulated foreign cryptos through high taxation, it’s clear that India doesn’t want to shut the door on innovation entirely. Instead, the goal is to channel demand toward domestic, regulated alternatives.
The Rupee’s Digital Evolution
Whether the Indian public will embrace ARC remains to be seen. But one thing is certain: the rupee — in both its physical and digital forms — is here to stay.
With the ARC, India is positioning itself not just as a participant, but as a policy pioneer in the evolving global stablecoin race. In a world where financial sovereignty increasingly depends on technological independence, New Delhi is betting that the future of the rupee will be written in code.
Source: Source : The Shib Daily
Post a Comment