India is all set to pitch the idea of a central bank digital currency (CBDC) at the upcoming BRICS summit on September 12 and 13, reported the Hindu Business Line quoting a source close to the development. The Reserve Bank of India (RBI) had proposed linking the digital currencies of all member central banks for trade and transactions early in January. If the proposal goes through, the alliance could see a paradigm shift in how they settle cross-border transactions.
The source said on the condition of anonymity that finance ministers of all member nations are set to meet in early September to discuss the way forward on CBDCs. “The BRICS Finance Ministers and Central Bank Governors (FMCBG) track is expected to meet again in early September to provide greater clarity on the possible way forward on CBDC and fast payment system linkages that could be adopted at the BRICS Summit,” a source tracking the matter told Businessline.
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BRICS CBDC Mechanism Can Cut Costs, Save Billions in Transaction Fees
The CBDC payment system can save the BRICS alliance billions in transaction fees during settlements. The conversion rate will no longer be applicable, as the bloc will sideline the US dollar for trade. The digital currency will only be available to member nations, and the mechanism will not allow other currencies to enter. This will also make the 11-member bloc self-reliant and not dependent on external forces for payment services. The US dollar will be the hardest hit if the development plays out as planned.
BRICS has been eyeing CBDC currency for over three years, and could see a breakthrough at the 2026 summit. India is set to host the 18th summit in New Delhi next month. The high-level meeting will be attended by world leaders, finance ministers, diplomats, and other dignitaries. All eyes are on the summit, as the alliance is set to realign the ways of payment settlements. Several other developing countries could join the mechanism if it becomes a success in the global markets.