India, Russia explore digital currency payments

India and Russia are collaborating on a mechanism to utilize digital currencies for their bilateral trade settlements. This collaboration aims to facilitate faster and more efficient cross-border payments, as both nations seek to bolster their economic ties. Herman Gref, CEO of Russia's largest lender Sberbank, stated that the Russian central bank and India's Reserve Bank are working together on this initiative.

The move comes amid efforts to reduce payment frictions in trade between the two countries and deepen their economic connections. Gref emphasized that digital currencies offer significant potential for all bilateral settlements, predicting increased demand and growth in this area. Russia introduced its Central Bank digital currency, the digital ruble, on September 1 through major banks, including Sberbank.

India had previously launched a digital currency on a pilot basis in 2022, now utilized in selected government programs. The Kremlin indicated that Russia would discuss the potential use of digital currencies for trade settlements with BRICS members and partners during the upcoming summit in New Delhi. India has also endorsed the use of central bank digital currencies for bilateral trade and cross-border payments.

The India-Russia discussions align with a broader BRICS effort to devise more efficient methods for international money transfers. Finance ministers and central bank governors of BRICS nations discussed the feasibility of cross-border payment mechanisms during a meeting. They acknowledged the efforts of the BRICS Payment Task Force in exploring practical solutions under the BRICS Cross-Border Payments Initiative, following directives from leaders in the Kazan and Rio Declarations.

The task force explored cross-border interoperability of payment and messaging channels and examined promoting trade settlements and investments using the local currencies of BRICS countries. The BRICS group emphasized that the task force should respect national priorities and recognize the lack of a one-size-fits-all approach to cross-border payments.

They encouraged the task force to continue discussions and develop practical solutions for efficient, low-cost, accessible, and secure cross-border payments among BRICS countries.