Current Context: On 11 August 2026, RBI Governor Sanjay Malhotra confirmed that BRICS countries were discussing the interlinking of their fast-payment systems and central bank digital currencies for cross-border transactions. The proposed framework would allow trade, tourism and remittance payments to be settled faster and at a lower cost.
- The proposed arrangement could connect national systems such as India’s UPI and Brazil’s Pix.
- Another option involves linking central bank digital currencies, including India’s Digital Rupee.
- Payments may be settled directly in the participating countries’ local currencies.
- It could reduce dependence on multiple correspondent banks for international transactions.
- Faster settlement would lower transaction fees and foreign-exchange conversion costs.
- Exporters and importers, particularly MSMEs, could receive payments more quickly.
- The system could make remittances and payments by international tourists easier.
- It would strengthen financial and trade integration among BRICS members.
- India’s position is focused on improving payment efficiency and internationalising the rupee, not formally replacing the US dollar.
- Major challenges include cybersecurity, data protection, exchange-rate risks, interoperability and compliance with anti-money-laundering rules.
- Participating countries must agree on technical standards, settlement arrangements, dispute resolution and regulatory supervision.
Question:
Q1. What is the present status of the proposed BRICS cross-border payment arrangement?a) It has completely replaced SWIFT
b) A common BRICS currency has been launched
c) Linking fast-payment systems and CBDCs is under discussion
d) It is operated by the New Development Bank
Answer: c) BRICS countries are considering links between their fast-payment systems and central bank digital currencies, but a unified BRICS payment system has not yet become operational.
