What Is RBI Proposing at BRICS?
RBI’s proposal centres on encouraging BRICS countries Brazil, Russia, India, China and South Africa to explore interoperability between their respective CBDCs. Instead of relying on correspondent banks and the SWIFT messaging system, transactions could be settled directly using digital currencies issued by participating central banks.
India has already made progress through its own digital rupee pilots, positioning itself as a credible advocate for sovereign digital money in international trade and settlements.
Why Cross-Border Payments Need Reform
Cross-border payments are often slow, expensive and opaque. Multiple intermediaries, currency conversions and compliance checks can delay transactions and raise costs, especially for emerging economies.
RBI officials believe CBDC-based systems could reduce settlement times from days to minutes while improving transparency and reducing operational risk.
Strategic Benefits for India and BRICS
One of the key motivations behind the RBI’s thinking is strategic autonomy. A CBDC-based settlement framework could help BRICS countries reduce exposure to geopolitical risks arising from sanctions, payment blockages and dollar liquidity shocks.
For India, the initiative aligns with its broader push to internationalise the rupee and strengthen its role in global trade without undermining financial stability.
What Are the Risks Involved?
Despite its promise, the RBI remains cautious. CBDCs raise concerns around cybersecurity, data privacy, capital flow volatility and regulatory coordination. Differences in monetary policy frameworks across BRICS could complicate implementation.
There is also the risk that poorly designed systems could facilitate illicit flows or expose financial systems to new vulnerabilities.
Global Context and India’s Position
Several countries, including China, have already tested cross-border CBDC pilots. India’s participation in BRICS discussions allows it to shape rules rather than adopt them later.
The Road Ahead
Any BRICS-wide digital currency framework would take years to design and test. However, RBI’s push signals India’s intent to remain at the forefront of financial innovation while safeguarding monetary sovereignty.
Whether BRICS can translate this ambition into a working system will depend on political consensus, regulatory trust and technical coordination.
