India is seeking to advance discussions within the BRICS group on linking central bank digital currencies (CBDCs), with the aim of making cross-border trade and payments faster, cheaper and more secure.
The initiative builds on a declaration adopted by BRICS leaders in 2025 in Rio de Janeiro, which highlighted the potential of digital financial technologies to improve international payments. However, significant technical, regulatory and political obstacles remain before such a system can become operational.
Technical and Political Obstacles
Although several countries have developed or tested central bank digital currencies, their adoption by consumers and businesses remains limited in many markets. Differences in financial regulations, payment infrastructure and data standards could make it difficult to establish a common cross-border system.
Political considerations could also complicate efforts to connect national payment networks. Countries would need to agree on common technical standards while maintaining control over their domestic monetary and financial systems.
Connecting Local Payment Systems
Reserve Bank of India Governor Sanjay Malhotra said in August that BRICS countries were discussing ways to connect fast payment systems and CBDCs to facilitate international transactions.
The proposal is intended to build on existing national payment platforms rather than create an entirely new global system. India’s Unified Payments Interface (UPI) and Brazil’s Pix are among the payment systems that have demonstrated the ability to process large volumes of transactions quickly.
According to figures cited by the Financial Times, UPI and Pix together processed more than $10 trillion in payments over an 18-month period, highlighting the scale that national instant-payment systems can potentially bring to cross-border transactions.
Is BRICS Seeking to Reduce Reliance on the Dollar?
The initiative comes alongside broader efforts by BRICS members to increase the use of their national currencies in international trade.
However, the proposed CBDC and payment-system connections do not amount to the creation of a common BRICS currency or an immediate replacement for the US dollar. Instead, the focus is on providing additional mechanisms for conducting cross-border transactions directly between participating countries.
BRICS has also encouraged greater use of local currencies in trade, although differences in exchange-rate regimes, capital controls, currency regulations and trade balances continue to pose challenges.
Greater Use of Local Currencies
The expanded BRICS group now includes 11 members, representing a wide range of economic systems and financial markets. This diversity makes cooperation potentially significant, but also creates difficulties in establishing a unified payment framework.
For India, linking digital currencies and fast-payment networks could reduce transaction costs and settlement times while giving businesses additional options for international payments.
The success of the initiative will ultimately depend on whether participating countries can overcome regulatory and technical differences and establish systems capable of working securely across national borders.
