The Reserve Bank of India has put forward a significant proposal to link the official digital currencies of BRICS member countries. This move aims to streamline cross-border trade and tourism payments, according to sources cited by Reuters. The initiative could help diminish dependence on the US dollar as global geopolitical tensions continue to escalate.
Building on BRICS Summit Declaration
This proposal directly builds upon a declaration made during the 2025 BRICS summit held in Rio de Janeiro. That declaration specifically called for enhanced interoperability among the payment systems of member nations to improve the efficiency of international transactions.
Current Digital Currency Landscape
India's own digital currency, the e-rupee, has already attracted approximately 7 million retail users since its launch in December 2022. Meanwhile, China has publicly stated its intention to expand the international usage of the digital yuan. The RBI has formally recommended that this proposal to link central bank digital currencies be included on the agenda for the 2026 BRICS summit.
Potential Challenges and Solutions
One source indicated that reluctance among some BRICS countries to adopt technological platforms developed by others might slow down progress. Any concrete advances would require broad consensus on both technological standards and regulatory frameworks.
To address potential trade imbalances that might arise, officials are exploring the use of bilateral foreign exchange swap arrangements between central banks. This approach could help manage currency flows more effectively.
RBI's Public Position and Goals
The Reserve Bank of India has publicly stated it is exploring methods to connect India's digital rupee with other nations' CBDCs. The primary goals are to accelerate cross-border payments and expand the currency's global footprint. However, the RBI has stressed that this effort is not specifically intended to promote de-dollarization.
Upcoming Summit and Implementation
India is scheduled to host the BRICS summit later this year. If the recommendation gains acceptance, a formal proposal to link the digital currencies of BRICS members would be introduced for discussion and potential implementation.
Although none of the BRICS countries have fully launched their digital currencies yet, all five core members are actively running pilot projects. The BRICS grouping includes Brazil, Russia, India, China, and South Africa, along with other nations.
Boosting E-Rupee Adoption
The RBI has implemented several measures to increase adoption of the e-rupee. These include enabling offline payments, adding programmability features for government subsidy transfers, and allowing fintech companies to offer digital currency wallets to consumers.
Key Discussion Points
According to sources, discussions about linking BRICS digital currencies would need to address several critical issues. These include establishing interoperable technology standards, creating governance frameworks, and developing mechanisms to settle trade imbalances effectively for the initiative to succeed.
Lessons from Past Currency Efforts
Previous efforts by Russia and India to expand trade using their local currencies encountered challenges. Russia accumulated large rupee balances with limited options for using them. This situation prompted the RBI to permit such balances to be invested in domestic bonds as a solution.
