RBI Pushes BRICS Digital Currency Link to Cut US Dollar Dependence: Report

India’s central bank has proposed a major shift in how BRICS nations handle cross-border payments. According to a report, the Reserve Bank of India (RBI) has recommended linking the digital currencies of BRICS members, a move that could make trade and tourism payments smoother while gradually reducing dependence on the US dollar amid rising geopolitical tensions.

RBI Proposes Linking BRICS Digital Currencies: What’s the Plan?

India’s central bank has suggested that BRICS nations explore linking their official digital currencies to simplify cross-border transactions and improve payment efficiency. Two sources familiar with the matter said the proposal has been recommended for inclusion on the agenda of the upcoming 2026 BRICS summit, which India will host later this year.

If accepted, this would mark the first formal proposal to connect the central bank digital currencies (CBDCs) of BRICS nations — a bloc that includes Brazil, Russia, India, China and South Africa, among others.

Why RBI’s Proposal Matters

Reducing Reliance on the US Dollar

The proposed linkage could help reduce reliance on the US dollar, particularly as geopolitical tensions intensify. Cross-border trade and tourism payments currently depend heavily on dollar-based settlement systems, which can be vulnerable to sanctions and policy shifts.

The initiative could also irritate the US, which has previously warned against efforts to bypass the dollar.

US Reaction and Political Context

US President Donald Trump has previously said the BRICS alliance is "anti-American", and he has threatened to impose tariffs on its members. The renewed attention on BRICS comes amid Trump’s revived trade-war rhetoric and warnings aimed at countries aligning more closely with the bloc.

What the RBI Has Recommended

CBDC Proposal for BRICS Summit

The Reserve Bank of India (RBI) has recommended to the Indian government that a proposal to connect central bank digital currencies (CBDCs) be placed on the agenda for the 2026 BRICS summit. The sources requested anonymity as they were not authorised to speak publicly.

The RBI, India’s central government, and the central banks of China, Brazil, and Russia did not respond to queries seeking comment, while the South African central bank declined to comment.

Notably, the RBI's proposal to link BRICS' CBDCs for cross-border trade finance and tourism has not been previously reported.

Building on Earlier BRICS Payment Initiatives

2025 Rio Declaration

The RBI’s proposal builds on a 2025 BRICS summit declaration in Rio de Janeiro, which called for interoperability between members’ payment systems to make cross-border transactions more efficient.

The RBI has publicly stated its interest in linking India’s digital rupee with other countries’ CBDCs to speed up international payments and expand the global use of the rupee. However, it has also clarified that these efforts are not aimed at promoting de-dollarisation.

Current Status of BRICS Digital Currencies

CBDC Pilots Across BRICS Nations

While none of the BRICS members have fully launched their digital currencies, all five main members are currently running pilot projects.

• India’s digital currency, known as the e-rupee, has attracted 7 million retail users since its launch in December 2022

• China has committed to expanding the international use of the digital yuan

The RBI has encouraged e-rupee adoption by enabling offline payments, programmability for government subsidy transfers, and allowing fintech firms to offer digital currency wallets.

Challenges in Linking BRICS Digital Currencies

Technology, Governance and Trade Imbalances

For the proposed BRICS CBDC linkage to work effectively, discussions would need to address:

• Interoperable technology standards

• Governance and regulatory frameworks

• Mechanisms to settle imbalanced trade volumes

One source cautioned that hesitation among member countries to adopt technology platforms from other nations could slow progress, making consensus on technology and regulation essential.

Foreign Exchange Swaps as a Possible Solution

To manage trade imbalances, one idea under consideration is the use of bilateral foreign exchange swap arrangements between central banks, the sources said.

Previous efforts by India and Russia to increase trade in local currencies faced difficulties. Russia accumulated large Indian rupee balances that it struggled to use, leading India’s central bank to allow those funds to be invested in local bonds.

Under the new proposal, weekly or monthly settlements could be conducted through swap arrangements.

BRICS Expansion and Long-Term Outlook

Founded in 2009 by Brazil, Russia, India and China, BRICS later added South Africa and has since expanded further to include countries such as the United Arab Emirates, Iran and Indonesia.

Past attempts to transform BRICS into a major economic counterweight — including the idea of a common BRICS currency proposed by Brazil — failed to gain consensus and were eventually shelved.

CBDCs vs Stablecoins: RBI’s Position

While global enthusiasm for CBDCs has softened due to the rise of stablecoins, India continues to promote the e-rupee as a safer and more regulated alternative.

CBDCs "do not pose many of the risks associated with stablecoins," RBI Deputy Governor T Rabi Sankar said last month.

"Beyond the facilitation of illicit payments and circumvention of control measures, stablecoins raise significant concerns for monetary stability, fiscal policy, banking intermediation and systemic resilience," Sankar said.

India fears that widespread stablecoin adoption could fragment national payment systems and weaken its digital payments ecosystem, according to a Reuters report from September.