Why in News?
The Reserve Bank of India has recommended that linking central bank digital currencies (CBDCs) of BRICS countries be included on the agenda of the 2026 BRICS Summit to enhance cross-border payments.
Description:
Proposal:
- What: Link CBDCs of BRICS members for cross-border transactions.
- Why: Faster, cheaper, more efficient payments; reduced dependence on correspondent banking.
- Status: Recommendation; to be tabled at 2026 BRICS Summit in India if accepted.
Background:
- Builds on 2025 BRICS declaration (Brazil) pushing interoperability among members’ payment systems.
- All five core BRICS members (Brazil, Russia, India, China, South Africa) are running CBDCs pilot projects; none has fully launched nationwide yet.
India’s Position:
- Aims to promote the global use of the rupee via technological linkage.
- Not positioned as de-dollarisation, per RBI’s public stance.
About e-Rupee (Digital Rupee):
- Issuer: Reserve Bank of India (RBI)
- Nature: Central Bank Digital Currency (CBDC) — sovereign digital legal tender
- Launch: December 2022 (pilot phase)
- Forms: e₹-W (Wholesale) for interbank settlements, e₹-R (Retail) for public use
- Technology: Token-based digital currency (not a cryptocurrency)
- Legal Status: Same as physical rupee notes/coins
- Objective: Faster payments, reduced cash handling costs, improved settlement efficiency
- Distinct Features: Direct claim on RBI; no credit risk; works without bank intermediation
About BRICS:
The BRICS is currently composed of eleven countries: Brazil, China, India, Russia, South Africa, Egypt, Ethiopia, Indonesia (new member), Iran, Saudi Arabia, and the United Arab Emirates.
Key Institutions under BRICS:
- New Development Bank (NDB): headquartered in Shanghai
- Contingent Reserve Arrangement (CRA): financial safety net
- Summit: Annual BRICS Leaders’ Summit. Current President: India (rotational presidency)
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