The Reserve Bank of India (RBI) has reportedly put forward a key proposal suggesting the linking and interoperability of Central Bank Digital Currencies (CBDCs) among BRICS member nations to facilitate cross-border trade transactions. This initiative, reported by Reuters, is seen as a strategic step to enhance trade efficiency, mitigate risks associated with reliance on traditional payment systems, and accelerate the de-dollarization agenda within the expanded economic bloc.
Under the proposal, BRICS countries—Brazil, Russia, India, China, South Africa, and their new partners—would work toward establishing a shared digital infrastructure that allows for instant and atomic settlement of payments using their respective national CBDCs (such as India’s e-rupee or China’s e-yuan). Currently, cross-border settlements often involve high fees, long waiting times, and complex conversion processes using intermediary banks and the SWIFT network.
By leveraging blockchain technology and interconnected CBDC systems, the RBI aims to create a streamlined, low-cost alternative for settling bilateral and multilateral trade balances. This move is strongly aligned with the overarching BRICS objective of bolstering local currency utilization and developing resilient financial infrastructure independent of Western-dominated payment systems, particularly in light of increasing geopolitical tensions and the threat of financial sanctions.
While the concept has strong backing among member states keen on increasing payment system sovereignty, technical hurdles—including regulatory harmonization, differing technological standards, and governance structures—remain significant. The proposal is expected to form a central theme for discussion at upcoming BRICS financial summits as the bloc seeks to define the operational framework for this joint digital currency linkage.
Source: India’s central bank proposes linking BRICS digital currencies for trade: Reuters
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