Source Reuters
New Delhi: India’s central bank has proposed a plan to explore interoperability among digital currencies being developed by BRICS nations, according to sources familiar with the discussions. The move is aimed at easing cross-border payments, reducing transaction costs, and lowering reliance on the U.S. dollar for trade settlements among the bloc’s members.
The proposal, put forward by the Reserve Bank of India (RBI), suggests creating technical and regulatory pathways that would allow central bank digital currencies (CBDCs) of BRICS countries—Brazil, Russia, India, China, and South Africa—to be linked for faster and more secure international transactions. The idea has been shared in preliminary consultations with counterparts within the BRICS framework, the sources said.
If implemented, the linkage could enable near-instant settlements for trade and remittances between member countries, cutting delays associated with traditional correspondent banking systems. It could also help businesses and governments manage currency conversion risks more efficiently.
India launched a pilot of its digital rupee (e₹) in both wholesale and retail segments, while China has advanced significantly with its digital yuan trials. Other BRICS members are also at varying stages of CBDC development. The RBI’s proposal reportedly focuses on interoperability standards rather than a single shared currency, allowing each nation to retain monetary sovereignty.
Officials cautioned that the discussions are at an early stage and face challenges, including alignment on cybersecurity standards, data privacy rules, anti-money laundering safeguards, and legal frameworks across jurisdictions. Any final decision would require political backing from BRICS governments and extensive testing by central banks.
The proposal comes amid broader efforts by BRICS nations to strengthen financial cooperation and promote the use of local currencies in trade. Analysts say a linked CBDC system could mark a significant step toward reshaping cross-border payments among emerging economies, though timelines for implementation remain uncertain.
The RBI has not publicly commented on the proposal.
