Polygon’s ARC Readies Compliant INR Stablecoin to Complement UPI and e‑Rupee
Polygon and partners are preparing ARC (Asset Reserve Certificate), a fully collateralised INR stablecoin targeted for Q1 2026 that aims to sit alongside India’s e‑Rupee CBDC and UPI rails. ARC is structured as a deposit token issued and custodied only by regulated entities (banks, NBFCs), with 1:1 off‑chain reserves held in cash, government securities or fixed deposits. Transactions will be restricted to whitelisted addresses and processed with Polygon/Uniswap v4 protocol hooks for compliance, traceability and programmable on‑chain flows. Polygon says ARC can act as an embedded transaction layer to speed INR redemptions and enable cross‑border swaps (eg. USDC → ARC → INR), reducing reliance on dollar‑pegged stablecoins and anchoring liquidity domestically. For traders, ARC could meaningfully increase on‑chain INR liquidity, lower settlement times and costs for high‑volume payments, and expand rupee‑pegged DeFi instruments. However, regulatory acceptance by the Reserve Bank of India (RBI) and broad adoption by banks and fintech firms are decisive: approval would likely attract significant capital into on‑chain INR markets, while strict constraints or rejection would limit uptake. Primary keywords: INR stablecoin, Polygon ARC, UPI, e‑Rupee, programmable money. Secondary keywords: cross‑border payments, DeFi interoperability, deposit token, regulatory compliance.
Bullish
ARC increases prospects for on‑chain INR liquidity and programmable, low‑cost settlement rails — outcomes that tend to be bullish for the price and utility of an associated INR stablecoin and for trading venues that support INR pairs. In the short term, announcements and development milestones can boost speculative interest and on‑chain flows into INR markets, increasing demand for liquidity and trading volume. Over the medium to long term, if regulators (RBI) formally accept the ARC model and major banks adopt it, ARC could attract sizeable capital from dollar‑pegged stablecoins and remittance corridors, strengthening on‑chain INR depth and reducing slippage for INR pairs — a structural bullish factor. Conversely, heavy restrictions, limited issuer participation, or outright rejection by regulators would curb adoption and mute positive price effects, but that outcome is less likely to produce immediate selling pressure on other crypto assets. Overall, the net effect on the ARC token and on‑chain INR instruments is expected to be bullish conditional on regulatory approval and operational rollout.