Our Bureau
New Delhi
India is proposing for greater integration of central bank digital currencies (CBDCs) among BRICS nations to make cross-border payments faster, cheaper and more efficient, despite significant political, technical and regulatory challenges. The proposal is expected to feature as India hosts the BRICS summit in New Delhi on September 12-13.
India, which holds the BRICS chair this year, has proposed linking the digital currencies and payment systems of member countries. The initiative builds on a 2025 BRICS declaration that called for greater interoperability between payment systems and aims to reduce the cost and complexity of international transactions.
The proposal, however, faces hurdles. BRICS has expanded to 11 members, including countries with sharply differing political and economic interests. Tensions between Iran and the UAE, as well as India’s security concerns surrounding deeper financial integration with China, could make agreement on a common digital payment framework difficult.
Technical and regulatory differences also need to be resolved. A cross-border system would require compatible payment infrastructure, common standards and mechanisms to manage currency imbalances. Currency-swap arrangements could also be needed to ensure that countries can settle transactions smoothly.
The proposed initiative is not an attempt to create a common BRICS currency or replace the US dollar. Instead, officials and policymakers have stressed the practical objective of improving cross-border payments and enabling greater use of digital currencies.
If implemented, the initiative could strengthen financial connectivity among BRICS economies and give countries greater flexibility in conducting cross-border trade. However, its success will depend on whether members can overcome their political differences and agree on common technological and regulatory standards.