BRICS considers linking central bank digital currencies and payment systems for cross-border transactions

BRICS nations are exploring plans to link their central bank digital currencies and fast payment systems, such as India's UPI and China's CIPS, to lower cross-border transaction costs. Reserve Bank of India Governor Sanjay Malhotra announces that while discussions remain in early stages, the integration aims to bypass traditional dollar-based channels and increase payment resilience. Concurrently, India seeks to internationalize the rupee during its hosting of the 2026 BRICS summit.

BRICS CBDC linkage proposal

• ▪The Reserve Bank of India previously recommended placing a proposal to link BRICS digital currencies on the agenda for the 2026 BRICS summit hosted by India.
• ▪Reserve Bank of India Governor Sanjay Malhotra announced on August 11, 2026, in Mumbai that connecting CBDCs is one of several options being considered by BRICS.
• ▪BRICS member nations are exploring plans to connect their central bank digital currencies (CBDCs) to facilitate cross-border transactions, though discussions remain at an early stage.

Fast payment system integration

• ▪Connecting BRICS payment networks aims to make cross-border payments more resilient and reduce reliance on traditional US dollar-based channels.
• ▪The BRICS proposal includes linking fast payment networks, such as India's Unified Payments Interface (UPI) and China's Cross-Border Interbank Payment System (CIPS).
• ▪Technical, regulatory, and governance hurdles remain for the BRICS payment integration, and broader adoption would require supporting tools like currency swap lines.

Cross-border transaction cost reduction

• ▪Linking CBDCs could lower transaction costs by allowing payments to travel directly between nations, cutting out layers of traditional financial intermediaries.
• ▪Reserve Bank of India Governor Sanjay Malhotra stated that the primary appeal of linking BRICS payment systems and CBDCs is to reduce the cost of moving money between member economies.

Indian rupee internationalization

• ▪The Reserve Bank of India plans to continue advancing the internationalization of the Indian rupee and promoting the use of local currencies for cross-border trade and payments.
• ▪India's goal to internationalize the Indian rupee serves as a major driver behind its push to link CBDCs among BRICS countries.

RBI AI governance directive

• ▪Reserve Bank of India Governor Sanjay Malhotra urged Indian banks to identify all artificial intelligence models currently in use within their institutions.
• ▪Reserve Bank of India Governor Sanjay Malhotra directed Indian banks to implement board-approved artificial intelligence governance policies that balance innovation with safety.

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