Reserve Bank of India Governor Sanjay Malhotra confirmed on Tuesday that BRICS nations are actively discussing how to connect their national fast payment systems and central bank digital currencies (CBDCs). Speaking at the Ficci-IBA Annual Banking Conference in Mumbai, Malhotra said the initiative is still at the discussion stage, but several structural options are on the table. India currently holds the BRICS presidency and has recommended that CBDC interconnection be formally placed on the 2026 summit agenda.
A two-track technical approach is emerging. The first track would interlink existing retail payment rails such as India’s UPI with equivalent systems in Brazil, Russia, China, and South Africa, primarily for remittances and tourism. The second, more ambitious path would connect tokenized CBDCs—like India’s e‑Rupee, China’s e‑CNY, and Russia’s Digital Ruble—enabling direct settlement between central banks without commercial intermediaries. No final model has been chosen, and officials emphasize that political consensus and technical standardization remain open questions.
Members are at vastly different stages of CBDC readiness. India’s e‑Rupee has about 7 million retail users, China’s e‑CNY pilot is larger and already promoted for cross-border use, Russia’s Digital Ruble is in an operational pilot, while Brazil’s Drex and South Africa’s Digital Rand remain in early pilot phases with no nationwide rollout. All systems run on distinct ledger architectures, compounding the technical challenge.
Cost reduction, not ideology, is the main driver. Malhotra stressed that “cross-border payments is an area of interest for all of us… because there is a lot of scope for reducing costs, especially for retail transactions, and increasing speed.” By bypassing correspondent banking chains that stack intermediary fees and settlement delays, a direct rail could save significant sums for remittance-heavy economies. The RBI is simultaneously pursuing bilateral local-currency trade agreements with the UAE, Mauritius, Maldives, and Indonesia to internationalize the rupee.
The earlier push for a common BRICS currency has stalled. Brazil’s Lula first proposed a shared currency at the 2023 Johannesburg summit, and a mock note was briefly symbolic, but Russian President Vladimir Putin later said it was “too early” and warned of mismatches akin to the eurozone’s struggles. India and China were cool on the idea, and with BRICS expanding to include Egypt, Ethiopia, Iran, Saudi Arabia, and the UAE, a single currency is seen as unrealistic. The current CBDC linkage plan fits a narrower ambition—improving payment infrastructure without a shared unit of account.
Three fault lines could still derail the talks: trade asymmetry that could worsen deficits for smaller members, unresolved governance and interoperability standards, and potential political pushback from Washington, where former President Trump previously threatened tariffs over dollar-bypass efforts. These tensions underscore why officials call the work exploratory and have not set a timeline.
In a separate part of his address, Malhotra ordered Indian banks to inventory their AI models and build board‑approved governance frameworks, warning that “Indian banks cannot afford to sit on the sidelines.” The RBI intends to fold AI oversight into its broader supervisory framework, though no compliance deadline was given.
