The RBI has encouraged the adoption of the e-rupee by enabling offline payments, providing programmability for government subsidy transfers and by allowing fintech firms to offer digital currency wallets.
For the BRICS digital currency linkages to be successful, elements like interoperable technology, governance rules and ways to settle imbalanced trade volumes would be among the discussion topics, one of the sources said.
The source cautioned that hesitation among members to adopt technological platforms from other countries could delay work on the proposal, and concrete progress would require consensus on tech and regulation.
One idea that is being explored to manage potential trade imbalances is the use of bilateral foreign exchange swap arrangements between central banks, both sources said.
Previous attempts by Russia and India to conduct more trade in their local currencies hit roadblocks. Russia accumulated large balances of the Indian rupee for which it found limited use, prompting India’s central bank to permit the investment of such balances in local bonds.
Weekly or monthly settlements for transactions are being proposed to be made via the swaps, the second source said.
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Long road
Founded in 2009 by Brazil, Russia, India and China, BRICS later expanded to include South Africa and has since broadened further, adding newer members like the United Arab Emirates, Iran and Indonesia.
The bloc has returned to the limelight thanks to Trump’s revived trade-war rhetoric and tariff threats, including warnings aimed at countries aligning with BRICS. At the same time, India has edged closer to Russia and China as it faced trade friction with the US.
While interest in CBDCs has been dampened globally by rising stablecoin adoption, India continues to position its e-rupee as a safer, more regulated alternative.
CBDCs “do not pose many of the risks associated with stablecoins,” RBI Deputy Governor T Rabi Sankar said last month.
“Beyond the facilitation of illicit payments and circumvention of control measures, stablecoins raise significant concerns for monetary stability, fiscal policy, banking intermediation and systemic resilience,” Sankar said.
India fears widespread stablecoin use could fragment national payments and weaken its digital payments ecosystem, Reuters reported in September.
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