What appears, at first glance, to be a technical recommendation by India’s central bank may, in reality, mark one of the most consequential shifts in global monetary diplomacy in decades. According to open sources, the Reserve Bank of India has proposed that BRICS nations link their central bank digital currencies to facilitate cross border trade finance and tourism payments.
This is not a marginal policy experiment. It is a carefully calibrated move at the intersection of finance, geopolitics and international law, carrying implications far beyond payment efficiency. If advanced, the proposal could reshape how emerging economies transact with one another, subtly erode the dominance of the US dollar and test the resilience of the existing global financial order.
Why this proposal matters now
Timing is critical. India will host the 2026 BRICS summit later this year, placing New Delhi in a unique agenda setting position. The recommendation to place CBDC interoperability formally on the BRICS agenda would, for the first time, transform scattered pilot projects into a coordinated geopolitical initiative.
This comes amid renewed trade war rhetoric from Washington, explicit warnings by US President Donald Trump against BRICS efforts to bypass the dollar and growing frustration within emerging economies over the weaponisation of financial infrastructure through sanctions, tariffs and compliance regimes.
Against this backdrop, India’s move is neither accidental nor ideological. It is strategic.
CBDCs as infrastructure, not ideology
The RBI has been careful to publicly distance itself from overt de dollarisation rhetoric. Officials have repeatedly stated that efforts to internationalise the rupee are not aimed at undermining the dollar. Legally and diplomatically, this distinction matters.
Yet functionally, linking CBDCs across BRICS would reduce the transactional necessity of the dollar in specific corridors. Trade settlements, tourism payments and supply chain financing could increasingly occur without routing through US correspondent banks or SWIFT dependent structures.
This is not a frontal assault on dollar hegemony. It is a bypass.
History shows that financial power rarely collapses overnight. It erodes through alternatives that begin as efficiency tools and mature into strategic infrastructure.
The legal architecture challenge
From a legal standpoint, the proposal raises complex governance questions that are far from resolved.
Interoperable CBDCs require agreement on data standards, settlement finality, dispute resolution mechanisms, cybersecurity liability and regulatory oversight. Each BRICS member operates under distinct monetary frameworks, capital controls and legal doctrines.
For example, India’s cautious approach to capital account liberalisation differs sharply from China’s model of state controlled financial flows or Brazil’s more open market orientation. Aligning these systems without creating regulatory arbitrage or systemic risk will require unprecedented legal coordination.
The sources correctly note that governance rules will be as critical as technology. Without a binding multilateral framework, interoperability risks becoming fragmentation by another name.
Lessons from past failures
India and Russia’s earlier attempts to expand bilateral trade in local currencies offer a cautionary tale. The accumulation of unusable rupee balances by Russia exposed the asymmetry that arises when trade flows are imbalanced and settlement mechanisms are rigid.
The current proposal appears to have learned from that experience. The exploration of bilateral foreign exchange swap arrangements and periodic settlement cycles reflects a more mature understanding of monetary risk sharing.
However, swaps themselves are legal commitments with balance sheet consequences. They require trust not only in counterpart central banks but in political continuity, sanctions resilience and macroeconomic stability.
In a bloc as geopolitically diverse as BRICS, trust is not automatic.
India’s strategic tightrope
India’s position is particularly delicate. New Delhi maintains deep economic ties with the United States while simultaneously engaging more closely with Russia and China amid trade frictions with Washington.
By framing the CBDC linkage as a trade facilitation tool rather than a currency bloc, India preserves plausible deniability. Yet Washington is unlikely to miss the strategic signal. Trump’s prior characterisation of BRICS as anti American suggests that even incremental steps may provoke retaliatory rhetoric or policy.
India’s challenge will be to lead without appearing to lead too boldly.
CBDCs versus stablecoins: A regulatory contest
The RBI’s emphasis on CBDCs as safer alternatives to stablecoins reveals another layer of strategic intent. Stablecoins, often dollar denominated and privately issued, threaten to fragment national payment systems and dilute central bank control.
From a legal and monetary sovereignty perspective, India’s concern is well founded. Widespread stablecoin adoption can undermine capital controls, complicate monetary transmission and expose economies to foreign regulatory shocks.
By contrast, CBDCs preserve state authority while enabling innovation. Linking them across BRICS would create a public sector alternative to private global money.
This is as much about who governs digital money as about how it moves.
Global implications beyond BRICS
If successful, a BRICS CBDC network could become a template for other regional blocs. Middle powers seeking insulation from great power financial pressure would take notice. Over time, this could lead to a more plural monetary system, one defined less by a single reserve currency and more by interoperable networks.
Such a shift would not dismantle the dollar’s role overnight. But it would reduce its exclusivity. In international finance, exclusivity is power.
A long road with strategic payoff
Even the sources acknowledge that progress will be slow. Technological hesitation, regulatory divergence and political caution will all weigh heavily. Consensus within BRICS is never guaranteed.
Yet the significance of the proposal lies not in its immediacy but in its direction. It signals that emerging economies are no longer content to be rule takers in global finance. They are beginning, carefully and legally, to design alternatives.
For the international system, this is a quiet but profound development.
The future of money may not be loud. But it will be deeply political.