Grouping looks at pragmatic cross-border payment mechanism, local currency trade

As BRICS leaders prepare for their summit, member countries are advocating for "pragmatic" and "efficient" cross-border payment mechanisms, with a focus on promoting local currencies for trade and investment. Commerce Minister Piyush Goyal emphasized the importance of linking BRICS payment systems and trade in each other's currencies, highlighting India's Unified Payments Interface (UPI) as a potential model.

Goyal called for digital trade to become global and for the bloc to build together for emerging technologies, noting the immense potential to deepen cooperation and create resilient supply chains. Finance ministers and central bank governors of the BRICS nations met in Jaipur and Mumbai to discuss practical solutions for cross-border payments using local currencies, emphasizing the need for fast, low-cost, accessible, efficient, transparent, and safe payment systems.

The focus on local currencies and payment system integration comes amid ongoing negotiations between India and the United States over a trade deal, which has sparked criticism from US President Donald Trump who views BRICS as a threat to the dollar's dominance. While the BRICS countries aim to offer a viable alternative to the US dollar, promoting efficiency and inclusive economic globalization, the dollar remains the dominant currency for payment, trade, and investment, with central banks holding a significant portion of their foreign exchange reserves in US dollar assets.