Michaela
Blockchain scaling network Polygon has joined forces with fintech company Anq to develop the Asset Reserve Certificate (ARC), a government-supported digital token backed by Indian government securities. ARC will be directly anchored to the Government of India, marking a major step toward a sovereign-backed digital asset framework.
Key Points
- ARC will be directly anchored to the Government of India, marking a major step toward a sovereign-backed digital asset framework
- Each ARC token will be backed one-to-one by sovereign debt, creating a transparent and compliant system designed to strengthen, not disrupt, the Reserve Bank of India’s monetary framework
- Rather than allowing Indian liquidity to flow offshore in support of dollar-backed stablecoins, the proposed framework would anchor it to India’s sovereign instruments
Key points:
- Polygon and fintech firm Anq are developing the Asset Reserve Certificate (ARC), a government-backed digital token tied directly to Indian government securities and regulated within India’s financial framework.
- Each ARC token will be backed one-to-one by sovereign debt, creating a transparent and compliant system designed to strengthen, not disrupt, the Reserve Bank of India’s monetary framework.
- The initiative aims to keep liquidity within India by linking digital assets to domestic sovereign instruments, potentially lowering borrowing costs, boosting demand for government securities, and reinforcing India’s monetary sovereignty.
Sources cited by The Times of India revealed that the Asset Reserve Certificate (ARC) is being developed as a fully regulated, non-speculative digital asset designed to reflect the value of the Indian rupee.
Operating entirely within India’s financial system, each ARC unit will be backed one-to-one by sovereign debt, creating a transparent and compliant digital framework that reinforces, rather than disrupts, the Reserve Bank of India’s monetary system.
The initiative is said to establish a mechanism that ties the issuance of digital tokens directly to the acquisition of Government of India securities, ensuring each token is fully backed by tangible state assets.
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According to individuals familiar with the plan, this approach could enhance domestic liquidity for government borrowing, potentially lowering costs and driving consistent demand for sovereign debt instruments.
Rather than allowing Indian liquidity to flow offshore in support of dollar-backed stablecoins, the proposed framework would anchor it to India’s sovereign instruments. This shift could transform the growing digital asset market into a vehicle for strengthening the domestic government securities market and reinforcing the nation’s monetary sovereignty.
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If successful, ARC could mark a turning point in how nations approach digital finance. By linking blockchain innovation with traditional government securities, India may be setting a precedent for a new generation of state-backed digital infrastructure, one that merges efficiency, transparency, and accountability.
While questions remain about implementation, regulation, and scalability, the initiative signals a growing desire to shape digital currency models that align with national interests rather than compete with them.
In a global landscape where most stablecoins orbit around the U.S. dollar, India’s move represents a strategic assertion of financial independence, one that could inspire other countries to explore homegrown, blockchain-powered alternatives to traditional monetary systems.
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MICHAELA
Michaela is a news writer focused on cryptocurrency and blockchain topics. She prioritizes rigorous research and accuracy to uncover interesting angles and ensure engaging reporting. A lifelong book lover, she applies her passion for reading to deeply explore the constantly evolving crypto world.
