India's central bank has recommended linking BRICS nations' central bank digital currencies for cross-border payments, a move that could reduce dollar dependence but risks escalating tensions with Washington.
The Reserve Bank of India urged the government to add the proposal to the agenda of the 2026 BRICS summit India will host later this year, according to two sources cited by Reuters.
If approved, the initiative would mark the first formal attempt to connect CBDCs across BRICS members - Brazil, Russia, India, China, South Africa and newer additions including the UAE, Iran and Indonesia.
What Happened
The RBI's proposal builds on the 2025 BRICS summit declaration in Rio de Janeiro, which backed greater payment system interoperability among member nations.
India's e-rupee has attracted 7 million retail users since launching in December 2022, while China has pledged to boost international use of the digital yuan.
None of the BRICS members have fully launched retail CBDCs, with all five core nations still running pilot programs.
Why It Matters
President Trump has repeatedly threatened 100% tariffs on BRICS countries if they create a currency alternative to the dollar, calling the bloc "anti-American" and warning against attempts to undermine greenback dominance.
The timing adds complexity to already strained US-India relations following Trump's August 2025 decision to impose 50% tariffs on Indian goods - the highest rate on any country - including a 25% levy specifically targeting India's Russian oil purchases.
Trade negotiations between Washington and New Delhi collapsed after Prime Minister Modi declined to call Trump to finalize a deal, according to US Commerce Secretary Howard Lutnick, though India disputed this as "inaccurate."
RBI Deputy Governor T Rabi Sankar said last month that CBDCs "do not pose many of the risks associated with stablecoins," citing concerns about monetary stability and regulatory control amid rising global stablecoin adoption.