- RBI Governor Sanjay Malhotra confirmed BRICS members are discussing linking CBDCs and fast payment systems.
- India holds the 2026 BRICS presidency and wants CBDC interconnection on the summit agenda.
- A shared BRICS currency has been floated since 2023 but repeatedly stalled over economic disparities.
- Malhotra also ordered Indian banks to inventory their AI models and build governance frameworks.
Reserve Bank of India Governor Sanjay Malhotra told delegates at the Ficci-IBA Annual Banking Conference in Mumbai on Tuesday that BRICS nations are actively discussing how to connect their national fast payment systems and central bank digital currencies. He described the initiative as still confined to the discussion stage, though he said several structural options are already on the table. The remarks carry particular weight because India currently holds the BRICS presidency and is set to host this year’s summit, where the RBI has recommended that CBDC interconnection be formally placed on the agenda.
Why Malhotra Keeps Bringing Up UPI
Malhotra framed the entire push around a domestic comparison that Indian officials return to often. “Look at UPI, for example, it is instantaneous,” he said, questioning why cross-border remittances still take hours or days to clear when India’s own retail rail settles transactions in seconds. That framing suggests two distinct technical tracks rather than a single unified project. The first would interlink existing retail payment systems such as India’s UPI with equivalent rails in Brazil, Russia, China and South Africa, primarily targeting remittances and tourism spending. The second, more ambitious track would connect the tokenized CBDCs themselves, letting instruments such as India’s e-Rupee, China’s e-CNY and Russia’s Digital Ruble settle directly between central banks without routing through commercial intermediaries or third-party clearing houses.
Malhotra did not commit to either path over the other, and Reuters reported earlier this year that the RBI’s recommendation to New Delhi covered CBDC connectivity broadly rather than a single technical blueprint.
Five Countries, Five Different Stages of Readiness
Wiring these systems together technically is a separate problem from agreeing politically to do so, and the gap between BRICS members’ CBDC programs shows why.
None of the core BRICS economies has moved a retail CBDC beyond pilot status, and each system runs on different ledger architecture. That mismatch is one reason Malhotra kept his language cautious rather than announcing a launch date.
Why Cutting Correspondent Bank Fees Is the Real Motivator
Malhotra was explicit that cost, not ideology, is the immediate driver. “Cross-border payments is an area of interest for all of us, including the BRICS, because we do feel that there is a lot of scope for reducing costs, especially for retail transactions, and increasing speed,” he said. Correspondent banking chains for international remittances typically stack multiple intermediary fees and settlement delays that a direct rail could bypass entirely. For a bloc whose members send significant remittance and tourism flows to each other, even a modest reduction in transaction friction adds up across volume.
Alongside the multilateral discussions, Malhotra said the RBI will keep pushing to internationalize the rupee on a bilateral basis. The central bank has signed memoranda of understanding with the UAE, Mauritius, Maldives and Indonesia to encourage local-currency trade settlement, with more agreements in progress. He acknowledged that current volumes in local-currency trade remain small and said expanding them is a priority independent of what happens with BRICS-wide CBDC talks.
What Killed the Earlier Push for a Shared BRICS Currency
The current CBDC discussion is not the bloc’s first attempt at reducing dollar dependence, and understanding why the earlier effort failed explains why officials are now talking about interlinking systems rather than issuing a shared currency. Brazil’s Lula first raised the idea of a common BRICS currency at the 2023 Johannesburg summit, and a mock banknote even made it into Putin’s hands at the 2024 Kazan summit. But the proposal never advanced past symbolism. Putin himself closed the door on it that November, telling the Valdai Discussion Club that “it is too early to talk about this” and that creating a single currency was not among Russia’s goals. He later added that member economies would need comparable structure, integration and economic quality before such a project could work, pointing to the eurozone’s own struggles with mismatched economies as a cautionary example.
India was reportedly cool on the currency idea from the start, and China’s position stayed lukewarm throughout. With the bloc having since expanded to include Egypt, Ethiopia, Iran, Saudi Arabia and the UAE, aligning that many economies around one currency became even less realistic. What survived the collapse of the single-currency idea was a narrower ambition: settle more trade in national currencies and build payment infrastructure, such as the BRICS Pay initiative, that reduces reliance on Visa, Mastercard and SWIFT without requiring a shared unit of account. The CBDC interlinking plan Malhotra described this week fits that narrower, more technically achievable ambition rather than reviving the abandoned currency project.
The Three Fault Lines That Could Still Derail the Plan
Those tensions did not surface in Malhotra’s Mumbai remarks, but they sit underneath every version of this project that has been floated since 2023, and they are the reason officials keep describing the work as exploratory rather than committing to a rollout date.
Banks Get a Deadline-Free Order on AI
Malhotra used the second half of his address to issue a pointed instruction to Indian lenders on artificial intelligence, treating it as a parallel priority rather than a footnote. “Indian banks cannot afford to sit on the sidelines and watch,” he said, framing AI adoption as a capability the sector needs to actively pursue rather than a risk to be merely contained. He directed every bank to inventory the AI models currently in use and to establish board-approved governance frameworks aimed at limiting cyberattack exposure and operational failures. The instruction did not come with a compliance deadline in his remarks, but it signals that the RBI intends to fold AI oversight into its broader supervisory framework alongside the payments and CBDC work.
The Task Force Still Has No Timeline
No timeline has been set for either the payment-linkage talks or a decision on which technical model BRICS will pursue. India’s summit hosting role gives it leverage to keep CBDC connectivity on the formal agenda, but Reuters’ earlier reporting and Malhotra’s own phrasing both suggest the topic will be discussed rather than resolved this year. The practical test will be whether the task force Malhotra referenced can produce a concrete interoperability proposal before the summit convenes, since a repeat of the 2023-2024 currency debate, where symbolism outpaced technical groundwork, would leave the initiative in the same holding pattern that swallowed the earlier common-currency push.