RBI Proposes Linking BRICS Digital Currencies to Ease Cross-Border Trade, Reduce Dollar Dependence

India’s central bank has proposed that BRICS nations interlink their official digital currencies to simplify cross-border trade and tourism payments, a move that could gradually reduce reliance on the US dollar amid rising geopolitical tensions, according to sources familiar with the matter.

The Reserve Bank of India (RBI) has recommended to the Indian government that the proposal be placed on the agenda of the 2026 BRICS Summit, which India will host later this year. If accepted, it would mark the first formal attempt by the bloc to connect central bank digital currencies (CBDCs).

The BRICS grouping includes Brazil, Russia, India, China and South Africa, along with newer members such as the UAE, Iran and Indonesia.

The plan could attract opposition from the United States, which has repeatedly warned against initiatives aimed at bypassing the dollar. US President Donald Trump has previously described BRICS as “anti-American” and threatened trade penalties against its members.

The RBI, India’s central government, and the central banks of China, Brazil and Russia declined to comment, while South Africa’s central bank said it would not respond.

Building on Earlier BRICS Commitments

The RBI proposal builds on a 2025 BRICS declaration in Rio de Janeiro, which called for interoperability among national payment systems to improve cross-border transaction efficiency.

The RBI has publicly stated its interest in linking India’s e-rupee with other countries’ CBDCs to speed up international payments and expand the global use of the rupee, while maintaining that its efforts are not aimed at de-dollarisation.

None of the major BRICS economies have fully launched their CBDCs yet, but all are running pilot programmes. India’s e-rupee, launched in December 2022, has attracted around 7 million retail users, while China has pledged to expand international usage of its digital yuan.

Challenges and Possible Solutions

For the CBDC linkage to succeed, issues such as technology interoperability, governance frameworks, regulatory alignment and settlement of trade imbalances would need to be resolved, sources said. Hesitation among countries to adopt technology platforms developed by other members could slow progress.

One mechanism under discussion to manage trade imbalances is the use of bilateral foreign exchange swap arrangements between central banks, with settlements proposed on a weekly or monthly basis.

Earlier attempts by India and Russia to increase trade in local currencies ran into difficulties when Russia accumulated large rupee balances with limited avenues for use, prompting the RBI to allow investment of those funds in Indian bonds.

Long-Term Context

Founded in 2009, BRICS has struggled in the past to emerge as a cohesive economic counterweight, including a failed proposal for a common BRICS currency. However, renewed trade tensions and tariff threats from Washington have brought the bloc back into focus.

While global enthusiasm for CBDCs has softened due to the rise of stablecoins, India continues to position the e-rupee as a safer, more regulated alternative. RBI Deputy Governor T Rabi Sankar recently warned that stablecoins pose risks to monetary stability, fiscal policy, banking systems and overall financial resilience.