New Delhi: India is moving toward a significant international initiative in the field of digital currency, with the Reserve Bank of India (RBI) playing a key role. The RBI has proposed that BRICS nations link their respective central bank digital currencies (CBDCs) to simplify payments related to trade and tourism among member countries. Such a mechanism would make cross-border transactions faster, cheaper, and more efficient.
What is the objective?
This proposal comes at a time of rising geopolitical tensions and aims to reduce overdependence on the US dollar in global transactions.
Main reasons:
Reduce reliance on the US dollar
Cut transaction costs and settlement time
Strengthen financial cooperation among BRICS countries
How will the proposed system work?
Each BRICS country is already testing its own digital currency. The idea is to technically connect these systems so money can move directly between countries.
How payments may happen:
Digital currencies linked through central banks
Direct transfers without dollar conversion
Secure settlement controlled by member nations
Faster and more transparent cross-border payments
Global reaction
The proposal could face resistance, especially from the United States. Former US President Donald Trump has earlier warned against efforts to bypass the dollar. Meanwhile, the People’s Bank of China said it has no information on the proposal, while Russia and South Africa declined to comment.
Current status of the proposed system
The RBI’s recommendation draws inspiration from the 2025 BRICS Summit declaration issued in Rio de Janeiro, which stressed the need for interoperability among member countries’ payment systems to ease cross-border transactions.
As part of this vision, the RBI has publicly expressed interest in linking India’s digital rupee with other nations’ CBDCs to accelerate international payments and promote wider global use of the rupee. At the same time, it has clarified that this effort is not aimed at encouraging de-dollarization.
Also read: Investors Lost ₹10 Lakh Crore: Why Did the Indian Stock Market Fall Sharply?
While none of the BRICS nations has fully rolled out its digital currency, all five core members are currently running pilot projects. India’s digital currency, known as the e-rupee, has attracted around seven million retail users since its launch in December 2022. China, meanwhile, has committed to expanding the international use of its digital yuan.
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