India Proposes Linking BRICS Digital Currencies to Ease Cross-Border Payments

The Reserve Bank of India (RBI) has recommended that linking central bank digital currencies (CBDCs) be added to the agenda for the 2026 BRICS summit, according to two sources familiar with the matter who spoke anonymously because they were not authorized to discuss the proposal publicly.

If approved by the Indian government, this would mark the first time BRICS formally considers linking members’ digital currencies at a leaders’ summit. India will host the 2026 BRICS summit later this year after assuming the bloc’s presidency on January 1, 2026.

Building on Rio’s Payment Vision

The RBI’s proposal builds on commitments made at the 2025 BRICS summit in Rio de Janeiro, where leaders pushed for greater interoperability between members’ payment systems to improve cross-border transaction efficiency. The Rio declaration tasked finance ministers and central bank governors to continue discussions on the BRICS Cross-Border Payments Initiative, acknowledging progress made by the BRICS Payment Task Force in identifying pathways to enhance payment system connections.

The initiative aims to make trade and tourism payments between BRICS countries faster and cheaper while potentially reducing reliance on the US dollar as geopolitical tensions rise. However, the RBI has stated that its efforts to promote the rupee’s global use are not aimed at promoting de-dollarization.

Current State of BRICS Digital Currencies

None of the BRICS members have fully launched their digital currencies yet, but all five founding members are running pilot projects. India’s digital currency, called the e-rupee, has attracted 7 million retail users since its launch in December 2022. The RBI has encouraged adoption by enabling offline payments, providing programmability for government subsidy transfers, and allowing fintech firms to offer digital currency wallets.

China has pledged to boost international use of the digital yuan and operates the most advanced CBDC program globally. Through the mBridge cross-border payment project, China’s digital yuan accounted for approximately 95.3% of transaction activity, processing 4,047 cross-border transactions worth 387.2 billion yuan ($54.2 billion).

Brazil, Russia, and South Africa are also conducting pilot programs but remain in earlier stages of development. The expanded BRICS membership now includes the United Arab Emirates, Iran, Indonesia, Ethiopia, and Egypt, though their CBDC development varies.

Technical Challenges Ahead

For the BRICS digital currency linkages to succeed, member countries must address several complex issues. One source told Reuters that interoperable technology, governance rules, and methods to settle imbalanced trade volumes would be among the key discussion topics. The source cautioned that hesitation among members to adopt technological platforms from other countries could delay progress, and concrete advancement would require consensus on both technology standards and regulation.

One proposed solution to manage trade imbalances involves bilateral foreign exchange swap arrangements between central banks, with settlements conducted on a weekly or monthly basis. This approach attempts to address challenges experienced in previous attempts at local currency trade between BRICS members.

Historical precedent shows the difficulty of these arrangements. Previous attempts by Russia and India to conduct more trade in their local currencies hit roadblocks when Russia accumulated large balances of Indian rupees with limited use cases. India’s central bank eventually permitted investment of those balances in local bonds, but the experience highlighted the complexity of managing currency imbalances without established settlement mechanisms.

Geopolitical Tensions and US Response

The timing of India’s proposal comes amid heightened trade tensions between BRICS nations and the United States. President Donald Trump has repeatedly threatened 100% tariffs on BRICS countries that attempt to create alternative currencies or support moves to replace the US dollar. Trump has called the BRICS alliance “anti-American” and warned in January 2026 that countries trying to bypass the dollar would face severe tariffs and lose access to the US market.

The bloc has returned to prominence thanks to Trump’s trade war rhetoric and tariff threats. At the same time, India has edged closer to Russia and China economically as it has faced trade friction with the US. This initiative could further irritate Washington, which views any attempts to bypass the dollar as a direct challenge to American economic influence.

Past efforts to create a unified BRICS currency were unsuccessful. Brazil previously floated the idea of a common BRICS currency, but the proposal was rejected by other members. The current approach of linking existing national CBDCs appears more practical than creating an entirely new currency, though it still faces significant obstacles.

Positioning CBDCs Against Private Alternatives

While interest in CBDCs has declined globally due to rising stablecoin adoption, India continues positioning its e-rupee as a safer, more regulated alternative. RBI Deputy Governor T Rabi Sankar stated on December 12, 2025 that CBDCs “do not pose many of the risks associated with stablecoins.” He warned that beyond facilitating illicit payments and circumventing control measures, stablecoins raise concerns for monetary stability, fiscal policy, banking intermediation, and systemic resilience.

India fears widespread stablecoin use could fragment national payments and weaken its digital payments ecosystem. By developing CBDC infrastructure and cross-border linkages, India and other BRICS members aim to maintain control over their monetary systems while modernizing payment infrastructure.

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

A Bridge Between Digital Economies

India’s assumption of the BRICS presidency positions it to shape the bloc’s financial agenda throughout 2026. The proposal to link digital currencies represents an ambitious attempt to modernize cross-border payments between emerging economies while navigating complex technical, regulatory, and geopolitical challenges. Whether member countries can achieve the necessary consensus on technology standards and governance frameworks remains uncertain, but the proposal signals growing interest in alternatives to dollar-dominated payment systems as global economic power continues shifting.