RBI for De-dollarization; Proposes Linking BRICS' Digital Currencies: Reports

The Reserve Bank of India (RBI), the country's central bank, has proposed that BRICS nations explore linking their central bank digital currencies (CBDCs) to simplify cross-border trade and tourism payments, a move that could gradually reduce reliance on the US dollar amid rising geopolitical tensions.

The RBI has recommended to the Union government that the proposal be placed on the agenda of the 2026 BRICS summit, which India is set to host later this year. If accepted, this would mark the first formal proposal to interlink the digital currencies of BRICS members—Brazil, Russia, India, China and South Africa, along with newer members, reported Reuters.

The initiative could draw scrutiny from the United States, which has cautioned against efforts to bypass the dollar. US President Donald Trump has previously described BRICS as “anti-American” and has threatened tariffs against countries aligned with the bloc.

The RBI, the Indian government, and Brazil’s central bank did not respond to requests for comment. China’s central bank said it had no information to share, while the Russian and South African central banks declined to comment.

The proposal builds on a 2025 BRICS declaration in Rio de Janeiro that called for greater interoperability among member countries’ payment systems to improve the efficiency of cross-border transactions. The RBI has publicly stated its interest in linking India’s digital rupee with other CBDCs to speed up international payments and enhance the rupee’s global usage, while maintaining that such efforts are not aimed at de-dollarisation.

Although none of the BRICS nations has fully rolled out a CBDC, all five core members are running pilot programmes. India’s e-rupee, launched in December 2022, has attracted around 7 million retail users so far. China, meanwhile, has reiterated its intent to expand the international use of the digital yuan.

To promote adoption, the RBI has enabled offline e-rupee payments, introduced programmability for government benefit transfers, and allowed fintech firms to offer digital currency wallets.

Sources told Reuters that discussions on linking BRICS CBDCs would need to address interoperability of technology, governance frameworks and mechanisms to settle trade imbalances. One option under consideration is the use of bilateral foreign exchange swap arrangements between central banks to manage uneven trade flows, with periodic settlements proposed on a weekly or monthly basis.

Past efforts by India and Russia to expand local-currency trade faced challenges after Russia accumulated large rupee balances with limited avenues for use, prompting the RBI to allow investment of those funds in Indian bonds.

Founded in 2009, BRICS has expanded beyond its original members to include countries such as the United Arab Emirates, Iran and Indonesia. The bloc has regained prominence amid renewed trade-war rhetoric and tariff threats from the US.

While global enthusiasm for CBDCs has been tempered by the rise of stablecoins, India continues to promote its digital currency as a safer, regulated alternative. RBI Deputy Governor T Rabi Sankar recently warned that stablecoins pose risks to monetary stability, fiscal policy and financial systems, adding that widespread use could fragment national payment infrastructures.

The RBI has expressed concerns that unchecked stablecoin adoption could weaken India’s digital payments ecosystem, reinforcing its push for a sovereign digital currency framework.