RBI proposes linking BRICS digital currencies to ease cross-border payments: Report

India’s central bank has proposed that BRICS countries link their official digital currencies to facilitate cross-border trade and tourism payments, two sources told Reuters, a move that could reduce reliance on the US dollar amid rising geopolitical tensions.

The Reserve Bank of India (RBI) has recommended to the government that a proposal to connect central bank digital currencies (CBDCs) be included on the agenda for the 2026 BRICS summit, the sources said. They requested anonymity as they were not authorised to speak publicly.

India will host the summit later this year. If accepted, the recommendation would mark the first time a proposal to link the digital currencies of BRICS members is formally put forward. The BRICS grouping includes Brazil, Russia, India, China and South Africa, among others.

The initiative could irritate the United States, which has warned against efforts to bypass the dollar. US President Donald Trump has previously described the BRICS alliance as “anti-American” and has threatened to impose tariffs on its members.

The RBI, India’s central government, and the central banks of China, Brazil and Russia did not respond to requests for comment.

The RBI’s proposal to link BRICS CBDCs for cross-border trade finance and tourism payments has not been previously reported.

Building bridges

The proposal builds on a 2025 declaration at a BRICS summit in Rio de Janeiro, which called for greater interoperability between members’ payment systems to improve the efficiency of cross-border transactions.

The RBI has publicly expressed interest in linking India’s digital rupee with other countries’ CBDCs to speed up cross-border transactions and increase the global use of the rupee. It has, however, said that efforts to promote the rupee internationally are not aimed at de-dollarisation.

None of the BRICS members has fully launched a digital currency, but all five core members are running pilot projects.

India’s digital currency, known as the e-rupee, has attracted a total of seven million retail users since its launch in December 2022. China has separately pledged to boost the international use of the digital yuan.

The RBI has encouraged adoption of the e-rupee by enabling offline payments, introducing programmability for government subsidy transfers, and allowing fintech firms to offer digital currency wallets.

For the proposed BRICS digital currency linkages to work, issues such as interoperable technology, governance frameworks and mechanisms to settle imbalanced trade volumes would need to be addressed, one of the sources said.

The source added that hesitation among members to adopt technological platforms developed by other countries could delay progress, and that meaningful advances would require consensus on technology and regulation.

One option under discussion to manage potential trade imbalances is the use of bilateral foreign exchange swap arrangements between central banks, both sources said. Weekly or monthly settlements through these swaps have also been proposed, according to one of the sources.

Previous attempts by Russia and India to increase trade using local currencies faced challenges, with Russia accumulating large rupee balances that had limited use. This led India’s central bank to allow such balances to be invested in local bonds.

Long road

Founded in 2009 by Brazil, Russia, India and China, BRICS later expanded to include South Africa and has since added new members such as the United Arab Emirates, Iran and Indonesia.

The bloc has returned to prominence amid renewed trade-war rhetoric and tariff threats from Trump, including warnings aimed at countries aligning with BRICS. During the same period, India has moved closer to Russia and China as it faced trade friction with the United States.

Past efforts to position BRICS as a major economic counterweight have encountered obstacles, including a proposal for a common BRICS currency, an idea floated by Brazil but later abandoned.

While global interest in CBDCs has softened due to the rise of stablecoins, India continues to promote the e-rupee as a more regulated alternative.

“CBDCs do not pose many of the risks associated with stablecoins,” RBI Deputy Governor T Rabi Sankar said last month.

“Beyond the facilitation of illicit payments and circumvention of control measures, stablecoins raise significant concerns for monetary stability, fiscal policy, banking intermediation and systemic resilience,” he said.

India is concerned that widespread use of stablecoins could fragment national payment systems and weaken its digital payments ecosystem, Reuters reported in September.

(With inputs from Reuters)