BRICS Central Banks Push for Reshaping the International Financial Structure through CBDC Interoperability

The Reserve Bank of India (RBI) has urged the government to include a cross-border interconnection system for Central Bank Digital Currencies (CBDC) as a key agenda item at the BRICS summit hosted by India in 2026. This is seen as a strategic proposal to streamline trade and tourism among BRICS countries while gradually reducing dependence on the US dollar.

Political and Economic Background of the BRICS CBDC Interconnection Plan

This proposal comes amid escalating US-India trade tensions. The Trump administration imposed a 50% tariff on Indian imports, particularly applying a 25% tariff on Russian crude oil imports. Trade negotiations between the US and India were close to conclusion last mid-year but have since stalled in recent months, adversely affecting Indian companies exporting textiles, jewelry, and chemicals.

RBI’s emphasis on CBDC interoperability signals a desire among emerging economies to move away from the dollar-centric international financial system amid US-India tensions. If BRICS members—Brazil, Russia, China, South Africa, and recently joined UAE, Iran, and Indonesia—build a CBDC interconnection system, it could present a new model for international financial transactions.

Current Status of CBDC Development in Major BRICS Countries

None of the BRICS countries have fully implemented a CBDC yet, but all core nations are conducting pilot projects.

India launched a pilot for the e-Rupee in December 2022, currently serving about 7 million retail users. The Reserve Bank of India is working to increase adoption through features like offline payments, programmable subsidies, and integration with fintech wallets.

China has clearly stated its intention to expand the digital yuan globally, recently introducing policies allowing commercial banks to pay interest on digital yuan holdings. This aims to promote domestic adoption while increasing its utility in international transactions.

International Financial Significance of the CBDC Interconnection System

The development of a BRICS CBDC interconnection system signifies more than just technological innovation; it represents a reshaping of the international financial order. It can make cross-border payments faster and more efficient while reducing reliance on the US dollar as an intermediary.

This movement has raised concerns in Washington. Former President Donald Trump repeatedly warned that BRICS countries are pushing for alternative currencies to the dollar and threatened to respond with 100% tariffs. From the US perspective, CBDC interoperability is seen as a threat to the dollar’s status as the global reserve currency.

Future Challenges and Outlook

Realizing BRICS CBDC interoperability requires technical, regulatory, and political consensus. Harmonizing each country’s monetary policies and financial oversight systems is essential, along with the prior development of blockchain-based infrastructure.

If CBDC interoperability is officially adopted as an agenda item at the 2026 India-hosted summit, it could introduce a new variable into the international financial market. As cooperation among emerging economies’ CBDCs intensifies, the multipolarization of the reserve currency system is likely to accelerate. Close monitoring of US policy responses and the strategies of other advanced economies regarding CBDCs will be crucial for understanding their impact on the global financial landscape.