Reuters: India proposes linking BRICS digital currencies to facilitate trade

India’s central bank has proposed that BRICS countries link their official digital currencies to facilitate cross-border trade and tourism payments, potentially reducing reliance on the US dollar amid rising geopolitical tensions, Reuters reports.

The Reserve Bank of India (RBI) recommended to the government that a proposal connecting central bank digital currencies (CBDCs) be included on the agenda for the 2026 BRICS summit, which India will host later this year. If approved, this would mark the first formal initiative to link the digital currencies of BRICS members—Brazil, Russia, India, China, and South Africa—sources said.

The initiative could provoke friction with the US, which has warned against moves to bypass the dollar. US President Donald Trump previously described the BRICS bloc as “anti-American” and threatened tariffs on its members.

The RBI has actively promoted India’s digital rupee, or e-rupee, by enabling offline payments, government-programmable subsidies, and fintech-issued digital wallets. Since its December 2022 launch, the e-rupee has attracted over seven million retail users.

The proposed BRICS linkage would require consensus on interoperable technology, governance rules, and mechanisms to settle imbalanced trade volumes. “One idea being explored to manage potential trade imbalances is the use of bilateral foreign exchange swap arrangements between central banks,” the sources said. Previous efforts by Russia and India to trade in local currencies encountered hurdles, including excess rupee balances in Russia with limited utility, prompting investment in local bonds.

The proposal builds on a 2025 BRICS declaration advocating interoperability between members’ payment systems. RBI Deputy Governor T. Rabi Sankar emphasized the advantages of CBDCs over stablecoins, noting that the latter “raise significant concerns for monetary stability, fiscal policy, banking intermediation, and systemic resilience.”

While BRICS members have only piloted their digital currencies, India continues to push the e-rupee as a safer, regulated alternative, positioning the country at the forefront of regional digital finance integration.

By Vafa Guliyeva