BRICS 2026: India pitches for integration of central bank digital currencies — why CBDC linkage is an uphill task

The initiative builds on the declaration adopted 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 is seeking to link central bank digital currencies (CBDCs) across BRICS nations to facilitate faster and more efficient cross-border payments, with the proposal expected to be discussed at the group's summit later this week, Reuters reported, citing two sources.

The initiative builds on the declaration adopted 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.

New Delhi, which is chairing BRICS this year, will host the group's leaders in New Delhi from September 12 to 13.

Quick answers to key questions

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QUESTIONS

The linkage of central bank digital currencies (CBDCs) among BRICS nations aims to facilitate faster and more efficient cross-border payments, enhancing interoperability and improving transaction efficiency.

The integration of CBDCs is expected to face hurdles due to limited global adoption, regulatory complexities, and geopolitical tensions among member nations, making it a politically and technically demanding task.

Currency-swap arrangements may be necessary to address trade imbalances among BRICS countries, potentially providing a foundation for establishing a CBDC-linked payment network.

India's cautious approach towards deeper financial integration with China stems from national security concerns and the need for greater trust between the two nations, particularly regarding financial systems.

While Brazil proposed a common BRICS currency, the idea has not gained traction; the emphasis remains on linking CBDCs to enhance payment efficiency without seeking to replace dollar-based systems.

The Reserve Bank of India (RBI) had proposed linking the official digital currencies of BRICS members to support cross-border trade, Reuters reported in January.

The expanded BRICS grouping comprises Brazil, Russia, India, China and South Africa, along with Egypt, Ethiopia, Indonesia, Iran, Saudi Arabia and the United Arab Emirates.

Will CBDC integration face hurdles?

The proposed CBDC linkage is expected to feature on the agenda for the leaders' meeting. However, the relatively limited adoption of central bank digital currencies worldwide could make implementation difficult.

Efforts to develop common payment mechanisms within BRICS have previously made limited progress, highlighting the technical, regulatory and political challenges involved in connecting financial systems across countries with widely differing structures.

Geopolitical tensions among some members could further complicate the proposal. Differences between Iran and the UAE, for instance, remain a potential obstacle, with the UAE having severed financial ties with Iran, according to the Reuters report.

India-China financial concerns remain

India's cautious approach towards deeper financial integration with China could also pose a challenge. Reuters reported that such arrangements would require a greater degree of trust between the two countries.

India had previously stalled a proposal by China's Alipay to connect with India's instant payments system for cross-border transactions, citing national security concerns related to its Chinese ownership.

Currency-swap arrangements could also be necessary to address trade imbalances among participating countries before a CBDC-linked payment network could become operational, the Reuters report said.

BRICS explored alternatives to dollar payments

BRICS countries have previously examined ways to reduce their reliance on dollar-based payment systems. Brazil had proposed the creation of a common BRICS currency, but the idea failed to make significant progress.

US President Donald Trump had warned the bloc against pursuing a common currency and threatened to impose high tariffs on countries supporting such an initiative.

India, however, has maintained that it does not seek to replace the US dollar. Instead, the proposed linkage of official digital currencies is intended to make cross-border payments faster, easier and more efficient, according to the Reuters report.

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