NEW DELHI, 10 Sep (Reuters) – India will push for the interlinking of central bank digital currencies (CBDCs) among BRICS countries for cross-border payments at a summit at the end of this week, despite political and technical obstacles that could limit progress, two sources familiar with the discussions said.
India holds the BRICS presidency this year, and the bloc’s leaders are scheduled to meet in New Delhi on September 12 and 13. The Reserve Bank of India (RBI) proposed interlinking the official digital currencies of the member countries to facilitate international trade, Reuters reported in January.
The BRICS group includes Brazil, Russia, India, China and South Africa, as well as Egypt, Ethiopia, Indonesia, Iran, Saudi Arabia and the United Arab Emirates.
The proposal to link CBDCs will be on the leaders’ agenda, the sources said, although the limited adoption of digital currencies globally could complicate implementation. They asked not to be identified due to the sensitivity of the matter and because they were not authorized to speak to the media.
The Indian ministries of External Affairs and Finance, as well as the Reserve Bank of India (RBI), did not respond to requests for comment.
Political and Technical Challenges
The Indian proposal will be based on the 2025 BRICS summit declaration in Rio de Janeiro, which promoted interoperability among members’ payment systems to make international transactions more efficient.
Any move to interlink CBDCs, however, is likely to face significant challenges. Earlier discussions within BRICS on creating shared payment mechanisms have advanced little, underscoring the difficulties of integrating the financial infrastructure of a diverse group of countries.
Tense relations between countries, such as Iran and the United Arab Emirates, will continue to be a sticking point, as the UAE has severed financial ties with Iran, one of the two sources said.
India has also shown reluctance to deepen financial connectivity with China, the second source said, adding that such arrangements would require deeper trust among neighboring countries. India suspended the Alipay+ proposal to connect to the country’s instant payments system for cross-border transactions due to national security concerns over its ties with China, Reuters reported.
Currency swap agreements would also be needed to help manage trade imbalances before any CBDC integration could come online, the source added.
BRICS countries had previously explored alternatives to dollar-based payments, including Brazil’s proposal for a common currency for the group, though the plan never progressed. U.S. President Donald Trump had warned the bloc against such a move, threatening tariffs.
India is not interested in replacing the dollar, and linking the official digital currencies aims to make cross-border payments easier and faster, the second source said.
