India pushes BRICS digital payments

Agencies India is pushing to connect central bank digital currencies (CBDCs) among BRICS nations for seamless cross-border transactions during an upcoming summit in New Delhi, according to sources familiar with the discussions. India, currently chairing BRICS, is set to convene with the bloc's leaders on September 12-13. The Reserve Bank of India (RBI) has proposed integrating the countries' official digital currencies to streamline cross-border trade, as reported by Reuters in January.

The BRICS group comprises Brazil, Russia, India, China, and South Africa, along with Egypt, Ethiopia, Indonesia, Iran, Saudi Arabia, and the United Arab Emirates. The proposal to link CBDCs will be part of the agenda for the leaders' meeting, according to the sources. However, the limited global adoption of digital currencies could complicate the implementation process. The sources declined to provide their names due to the sensitive nature of the topic and their lack of authorization to speak to the media.

India's proposal builds upon the 2025 declaration made during the BRICS summit in Rio de Janeiro, which called for interoperability between members' payment systems to enhance cross-border transactions' efficiency. However, linking CBDCs is likely to encounter significant challenges. Previous discussions on creating shared payment mechanisms within BRICS have made little progress, highlighting the difficulties of integrating financial infrastructure across a diverse group of nations.

Tensions between countries, such as Iran and the UAE, could also pose obstacles to progress. The UAE has severed financial ties with Iran, one of the sources noted. Additionally, India has been hesitant to deepen financial connectivity with China due to national security concerns stemming from China's links to the country's instant payments system, as reported by Reuters.