Can BRICS bridge the gap with fast-payment systems and digital currencies?

As the BRICS summit in India approaches, a critical issue has emerged: connecting the countries' fast-payment systems and their digital currencies (CBDCs). India proposed this agenda item, recognizing it as a key test of whether the BRICS alliance can move from rhetoric to concrete infrastructure. The proposal aims to create a digital bridge between the nations' domestic payment networks, allowing for direct, near-instant settlements in local currencies using blockchain-like technology.

This would eliminate intermediaries and reduce fees, ending the dependence on the US dollar for transactions. For India, this is particularly important as its economy has faced challenges in recent months. The rupee has depreciated against the US dollar due to geopolitical tensions, which has impacted India's GDP rankings. By enabling direct settlements, BRICS could insulate itself from such currency-driven crises, ensuring economic stability even during global turbulence.

The proposal is not about creating a single BRICS currency, but about building interoperable systems that allow each nation's digital money to communicate with others. This approach could set a precedent for other regions, potentially leading to similar shifts away from a dollar-centric financial system. While the technical challenges are significant, India frames the proposal as a matter of functional efficiency rather than confrontation with the dollar.

The summit is seen as a critical opportunity for BRICS to demonstrate its ability to address shared vulnerabilities and develop shared solutions, rather than remaining a talk shop.