RBI Proposes Linking Digital Currencies Of BRICS Members - Key Details

India's apex bank RBI has proposed linking digital currencies of BRICS members, a move that would reduce reliance on the US dollar amid rising geopolitical concerns, including utilising the tariff power play tactics.

The Reserve Bank of India (RBI) has suggested the central administration a proposal, which could link central bank digital currencies (CBDCs) as part of the BRICS 2026 summit, as per a Reuters report.

India is set host the BRICS summit later this year. The BRICS member states includes Brazil, Russia, India, China and South Africa, among others.

The initiative could bother the US, which had warned BRICS of additional tariffs if they align themselves to an "anti-American" policy.

RBI's suggestion to connect BRICS' CBDCs comes after the push for interoperability between members nations payment system in last year's summit held in Rio de Janeiro.

The RBI has publicly expressed interest in linking India's digital rupee with other nations' CBDCs to expedite cross-border transactions and bolster its currency's global usage. It has, however, said its efforts to promote the rupee's global use are not aimed at promoting de-dollarisation.

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While none of the BRICS members have fully launched their digital currencies, all five main members have been running pilot projects, as per a Reuters report.

India's digital currency - called the e-rupee - has attracted a total of 7 million retail users since its launch in December 2022, while China has pledged to boost the international use of the digital yuan.

The RBI has encouraged the adoption of the e-rupee by enabling offline payments, providing programmability for government subsidy transfers and by allowing fintech firms to offer digital currency wallets.

For the BRICS digital currency linkages to be successful, elements like interoperable technology, governance rules and ways to settle imbalanced trade volumes would be among the discussion topics, one of the sources said.