New Delhi: India hopes the BRICS countries would adopt more central bank digital currencies (CBDCs) for cross-border trade with one another. But it does not want the group to create a single payment system they might be interpreted as an obstacle to the US dollar. The sources, who are close to the issue and wished not to be identified, said they obtained the information through the insider information.
India is chairing BRICS this year and PM Narendra Modi wants its member countries to transact using their own digital currencies instead. India’s approach would be a different one from a combined system, as it would permit individual countries to connect their individual digital currencies together. This would enable the countries to trade directly, reduce the contribution of banks and bring down the charges.
They believe it will be hard to reach a consensus on a single, group-wide payment system at the BRICS leaders’ meeting here this weekend.
India, too, would like tariff settlement in their own local currency, rather than a third currency such as the dollar. The Reserve Bank of India (RBI) has not expressed its views on the plan. Very little is being decided now as the finance ministers and the central bank chiefs started their meeting this week, said India’s Ministry of External Affairs spokesperson Randhir Jaiswal. He requested that reporters wait for the official statement.
Since Western countries imposed sanctions on Russia, the countries in the group have already begun the shift towards local currencies, which will enable them to carry out trade within their borders. Around 96% of India-Russia trade now takes place in rupees and rubles, Sberbank’s India head Ivan Nosov said.
The concept is based on the previous discussions of the BRICS regarding the closer integration of payment systems. In an interview in August, Bank of India Governor Sanjay Malhotra had said the BRICS members were already in talks to interface their fast payment systems with digital currencies primarily to reduce the cost of remittances.
Also, on the 2026 summit are being observed 20 years of the founding of BRICS.
