RBI proposes linking BRICS' digital currencies, says report - here’s why it would be an important move

The Reserve Bank of India (RBI) has proposed linking the official digital currencies of BRICS countries to facilitate cross-border trade and tourism payments, two sources said, as cited by Reuters. The move could help reduce reliance on the US dollar as geopolitical tensions continue to rise.The proposal builds on a declaration made at the 2025 BRICS summit in Rio de Janeiro, which called for greater interoperability among member countries’ payment systems to improve the efficiency of cross-border transactions. India’s digital currency, the e-rupee, has drawn about 7 million retail users since its launch in December 2022, while China has said it plans to expand the international use of the digital yuan.The Reserve Bank of India has recommended that a proposal to link central bank digital currencies (CBDCs) be placed on the agenda of the 2026 BRICS summit, sources said.One source told Reuters that reluctance among member countries to adopt technological platforms developed by others could slow progress on the proposal, adding that any concrete advances would require consensus on both technology and regulation.Both sources said one option being explored to address potential trade imbalances is the use of bilateral foreign exchange swap arrangements between central banks.The RBI has publicly said it is exploring ways to connect India’s digital rupee with other nations’ CBDCs to speed up cross-border payments and expand the currency’s global use, while stressing that the effort is not intended to promote de-dollarisation.India will host the summit later this year, and if the recommendation is accepted, a proposal to link the digital currencies of BRICS members would be introduced.Although none of the BRICS countries have fully launched their digital currencies, all five core members are running pilot projects.The BRICS grouping includes Brazil, Russia, India, China, and South Africa, among others.The RBI has sought to boost the adoption of the e-rupee by enabling offline payments, adding programmability for government subsidy transfers, and allowing fintech firms to offer digital currency wallets.One source said discussions on linking BRICS digital currencies would need to address issues such as interoperable technology, governance frameworks, and mechanisms to settle trade imbalances for the initiative to succeed.Earlier efforts by Russia and India to expand trade using their local currencies faced challenges, as Russia built up large rupee balances with limited avenues for use. This led RBI to allow such balances to be invested in domestic bonds.