India’s central bank proposes linking CBDCs of BRICS nations to reduce the bloc's dependence on the U.S. dollar

India is joining the long list of countries attempting to break away from U.S. dependence following President Donald Trump’s aggressive trade strategies.

India’s central bank, the Reserve Bank of India, has proposed linking the digital currencies of the BRICS alliance member states to make payments across borders easier. 

How will linking digital currencies change international trade?

The Reserve Bank of India (RBI) has suggested that the 2026 BRICS summit, which is set to be held in the country, include a formal proposal to connect the central bank digital currencies (CBDCs) of its members. The BRICS group currently includes Brazil, Russia, India, China, South Africa, the United Arab Emirates, Iran, and Indonesia.

Connecting the central bank digital currencies (CBDCs) will make “cross-border trade and tourism payments easier.” Under the current system, most international trades are settled using the U.S. dollar. This often requires using Western-led systems like SWIFT. With linked CBDCs, BRICS nations could settle trades directly with one another. 

The RBI’s proposal builds on an agreement made in Rio de Janeiro, 2025, that focused on making payment systems “interoperable.” 

While no BRICS member has fully launched a public CBDC, all five original members are running advanced pilot programs like India’s “e-rupee,” which has already reached 7 million retail users. China has also been aggressively supporting the international use of its digital yuan.

For the linking to be successful, the involved countries must agree on “interoperable technology” and governance rules. 

To fix trade imbalances, like when Russia previously ended up with a massive surplus of Indian rupees that it could not easily spend, the RBI is exploring “bilateral foreign exchange swap arrangements” that would allow central banks to exchange currencies at fixed rates to settle debts every week or month.

Why is the BRICS alliance moving away from the U.S. dollar?

U.S. President Donald Trump has recently called the BRICS alliance “anti-American” and has repeatedly threatened to impose 100% tariffs on countries that try to move away from the dollar. These threats have created trade friction between the U.S. and several BRICS members, including India.

The RBI has stated that its efforts to promote the rupee are not intended to be “anti-dollar,” but rather to protect its own economic interests. India has recently developed a closer relationship with Russia and China on trade issues to avoid the impact of U.S. trade wars.

RBI Deputy Governor T. Rabi Sankar recently warned that stablecoins pose risks to “monetary stability” and “banking intermediation,” and so the country is promoting the state-backed digital rupee to dissuade citizens from using dollar-pegged stablecoins for daily payments. 

With the addition of major oil producers like the UAE and Iran, as well as a large economy like Indonesia, to the BRICS alliance, it now has more power to create its own financial network. In late 2025, reports showed that a multi-CBDC platform involving China and the UAE, known as the “mBridge” project, is technically possible.

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