India is pushing BRICS members to explore linking their official digital currencies for cross-border trade, reviving the biggest question around the bloc’s financial ambitions: can BRICS reduce its dependence on the U.S. dollar?
What India is proposing
The idea is to improve interoperability between central bank digital currencies and payment systems used by BRICS members. In theory, that could make cross-border settlement faster and reduce reliance on traditional correspondent banking channels.
Is this a BRICS currency?
No. India is not proposing one shared BRICS currency. The concept is to connect national digital currencies and payment rails while each country keeps control of its own money.
Why the dollar question keeps coming up
Several BRICS members want more trade to be settled in local currencies, partly to reduce exposure to sanctions and dollar-based financial infrastructure. That ambition has made the bloc a focus of concern in Washington.
The hurdles are huge
Payment systems differ, regulations are not aligned and political tensions between some members remain serious. Reuters reported that previous efforts to build shared payment mechanisms have made limited progress.
Bottom line
BRICS is not replacing the dollar anytime soon. But a functioning digital-currency link would be a meaningful step toward making non-dollar trade easier — and that is why the idea is getting so much attention.
Source: Reuters
