BRICS Faces Strategic and Technological Challenges in Digital Currency Integration

The BRICS nations have initiated the development of a unified payment system, Brics Pay, aimed at facilitating trade and tourism among member countries. The project does not involve creating a single currency or completely abandoning the US dollar, but it will enable participants to conduct transactions without relying on Western payment infrastructures, reducing the impact of sanctions from the US and Europe on intra-BRICS financial flows.

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BRICS

Proposal by the Reserve Bank of India

The Reserve Bank of India (RBI) has proposed integrating the central bank digital currencies (CBDCs) of BRICS countries to streamline cross-border payments. According to media reports, this initiative is expected to be formally discussed at the 2026 BRICS summit in India.

Financial sources in New Delhi state that the RBI recommended presenting the initiative to Prime Minister Narendra Modi and the BRICS leadership. If approved, it would mark the first formal attempt to integrate digital currencies under a shared payment infrastructure. As Senator Vladimir Dzhabarov noted, "There will be no single currency, but a unified payment platform will exist.”

Brics Pay: Direct Transactions Outside Dollar Systems

The ultimate goal is to create a digital payment architecture allowing transactions in the national currencies of member states. Brics Pay aims to connect national payment systems and, eventually, integrate CBDCs, enabling direct cross-border settlements without using dollar-based systems like SWIFT. The project is particularly relevant as India chairs BRICS and Western economic pressures grow.

Technical Challenges and Project Outlook

The project remains in its early stages. No major BRICS country has fully deployed a central bank digital currency, with most initiatives limited to pilot programs. Key challenges include technical compatibility, data access, regulation of trade imbalances, and system governance. The RBI is considering additional tools, including currency swaps and settlement mechanisms, to prevent accumulation of unused national currency balances, a challenge noted in previous bilateral settlements.

Risks and Internal Contradictions

Integration faces obstacles due to varying levels of strategic trust among BRICS members and concerns about the dominance of certain currencies, especially India's wariness of an increased role for the Chinese yuan. In addition to these political factors, countries have identified technological risks in creating a unified platform.

According to RBI sources, the project is not aimed at completely abandoning the US dollar. The digital rupee is primarily seen as a tool to improve efficiency and reduce costs in international settlements. However, implementing a linked CBDC network within BRICS could significantly reduce reliance on Western payment infrastructures for the bloc's financial flows.