India's plan for a sovereign stablecoin disrupts the international cryptocurrency landscape through its dual-rupee approach

India's cryptocurrency sector is experiencing significant changes as blockchain companies Polygon and Anq consult with Sanjeev Sanyal, economic advisor to Prime Minister Narendra Modi, to discuss the possibility of a government-backed stablecoin framework

. These talks, which focus on digital asset innovation and tokenization, highlight the Indian government's intent to incorporate blockchain into its financial systems while retaining control over its currency . This move is in step with global developments in stablecoin regulation and adoption, positioning India to benefit from digital assets for economic advancement without relying on foreign-backed alternatives, as .

The envisioned stablecoin, provisionally called the Asset Reserve Certificate (ARC), would be entirely backed by Indian government securities (G-Secs) and Treasury Bills,

. Unlike cryptocurrencies driven by speculation or those pegged to the US dollar, the ARC is designed to be a regulated, stable digital asset that reflects the value of the Indian rupee . Each ARC token would be directly linked to sovereign assets, ensuring both transparency and adherence to local financial regulations. The system would use a "Twin-Rupee" structure: the Reserve Bank of India's central bank digital currency (CBDC) would handle settlements, while private entities would issue ARC tokens for daily use, . This two-tiered approach aims to foster innovation and affordable programmable payments, all while maintaining the RBI’s authority over monetary policy.

Polygon, recognized globally for its blockchain scaling solutions, and Anq, a fintech company based in Bangalore, are combining their strengths for this initiative

. Polygon’s background in asset tokenization for major institutions like BlackRock and JPMorgan adds weight to the project, while Anq’s expertise in India’s regulatory environment helps ensure the project aligns with national interests, . Their collaboration seeks to build a digital financial system that lowers remittance expenses, increases liquidity in the bond market, and reduces capital flight to foreign stablecoins . Additionally, the ARC could help the government raise funds domestically by boosting demand for G-Secs, turning digital asset growth into a tool for strengthening India’s fiscal position .

This project demonstrates India’s careful yet forward-thinking stance on digital finance. While stablecoins such as

and have seen widespread global adoption, their dependence on foreign reserves has sparked concerns about dollarization and loss of monetary control . By tying its stablecoin to national securities, India seeks to avoid these pitfalls while engaging in the worldwide trend toward digital currencies. The initiative also supports the Reserve Bank of India’s cautions regarding the risks of unregulated digital assets undermining monetary policy.

As Polygon and Anq continue to develop their proposal, government advisors are reportedly emphasizing the need for clear regulations to encourage adoption while protecting financial stability

. If the ARC is implemented successfully, India could become a leader in sovereign-backed digital currencies, providing a model for other countries looking to adopt blockchain technology without compromising monetary sovereignty . With global authorities, such as the Bank of England, proposing new rules to address stablecoin risks, India’s domestically developed solution could play a pivotal role in the future of digital finance.