BRICS Summit 2026: Dedollarisation by other methods? What RBI’s remarks on easier trade payment mechanisms means
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BRICS is aiming to make cross-border payments of member states faster and cheaper Photograph: (Others)
RBI’s BRICS payments push could make cross-border trade faster and cheaper. Mechanisms being considered include CBDCs, UPI links and local currency settlments. These could reduce dollar dependence without formally pursuing dedollarisation
BRICS is aiming to make cross-border payments faster, cheaper and less dependent on traditional financial channels. The Reserve Bank of India’s (RBI) recent comments and recommendations point towards a potentially significant shift in how trade and other cross-border payments could be settled among BRICS economies. This is not being described as dedollarisation per se. But it has elements of countries being able to settle trade in their local currencies.
What did RBI Governor Sanjay Malhotra say on BRICS payments?
RBI Governor Sanjay Malhotra recently said BRICS members were discussing possible links between their fast payment systems and central bank digital currencies, or CBDCs. “Cross-border payments is an area of interest for all of us, including the BRICS, because we feel there is a lot of scope for reducing cost,” Malhotra said in Mumbai.
Various options are on the table, he said, while highlighting the speed of India’s Unified Payments Interface (UPI), compared with international remittances that can take hours or days to settle.
BRICS is considering more than one mechanism
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Linking existing fast-payment systems is one way, while interoperability between national CBDCs is another. But a single BRICS-wide payment network is yet to take shape.
The Indian central bank had recommended that the linking of BRICS members’ CBDCs be included on the agenda of the 2026 BRICS Summit. The aim was to streamline cross-border trade, trade finance and tourism payments through compatible technology and governance arrangements.
India has been pushing the CBDC-linking proposal ahead of the BRICS Summit. But technical and political hurdles remain. There are questions over governance, technology compatibility and the issue of trade imbalances between member countries.
Currency-swap arrangements and regular settlement mechanisms could be required in the case of large bilateral trade imbalances.
Finance ministers and central bank governors have been discussing the BRICS Cross-Border Payments Initiative for some time. The BRICS Payment Task Force is exploring greater interoperability between member states’ payment systems.
The idea is for facilitating cross-border payments that are fast, low-cost, accessible, efficient, transparent and safe, while supporting trade and investment flows.
Settling trade in local currencies: The other part of the equation
The RBI is also pushing to expand the international use of the rupee and other national currencies. Malhotra said the RBI would continue efforts to internationalise the rupee and promote the use of local currencies for cross-border payments and trade. India already has bilateral local-currency settlement arrangements with the UAE, Indonesia, Maldives and Mauritius.
The RBI’s framework for international trade settlement through the rupee, including Special Rupee Vostro Accounts (SRVAs), is an arrangement alongside the existing system using freely convertible currencies.
The RBI’s Inter-Departmental Group on Internationalisation of the Indian Rupee (INR) had recommended expanding the use of local currencies, particularly with major trading partners.
Reducing dollar dependence without removing it entirely
These measures could reduce the need for, and dependence on, the US dollar in some bilateral transactions, even if “dedollarisation” is not the stated objective.
If two BRICS nations can use interoperable payment systems to settle directly in their respective currencies, the transaction may not need to be routed through the dollar.
For CBDCs, if digital currencies issued by participating central banks can eventually interact directly under agreed technical and regulatory standards, cross-border payments could become faster and potentially cheaper.
It is a form of smart diversification, and eventually a third currency such as the dollar may be required less for such transactions.
Is this BRICS dedollarisation?
The RBI and Indian government have not presented these initiatives as dedollarisation or as a move towards establishing a BRICS currency.
The RBI’s CBDC proposal is not aimed at promoting dedollarisation, and India’s objective is to make international transactions easier and faster, rather than to replace the US dollar as the world’s reserve currency.
India has been cautious about BRICS turning into an explicitly anti-dollar financial bloc. There is no agreed BRICS common currency yet. No plan has been announced for a BRICS alternative to the existing international monetary system either.
The big challenge of trade imbalances
The basic problem on any future payment mechanism is how to settle persistent trade imbalances. If a country accumulates large balances in another country’s currency but has limited opportunities to spend or invest them, local-currency settlement can become unsustainable.
To manage such imbalances, potential BRICS arrangements could require currency swaps and regular settlement mechanisms.
