BRICS countries are considering ways to connect their fast payment systems and central bank digital currencies, aiming to lower cross-border transaction costs and improve efficiency for businesses and consumers
BRICS nations are actively exploring how to connect their domestic fast payment systems and central bank digital currencies (CBDCs), a move that could reshape the landscape of cross-border payments among some of the world's largest emerging economies. According to Reserve Bank of India Governor Sanjay Malhotra, discussions are underway to identify practical options for linking these systems, with the goal of reducing the cost and complexity of international transactions within the BRICS bloc.
The BRICS group-comprising Brazil, Russia, India, China, and South Africa-has long sought to improve financial cooperation and reduce reliance on traditional cross-border payment networks dominated by major reserve currencies. India, which will host the 2026 BRICS summit, has placed particular emphasis on advancing digital payment infrastructure and promoting the use of local currencies in trade and settlement. Malhotra noted that while several technical and regulatory options are being considered, the process remains at an early stage and no final decisions have been made.
Reducing Friction in Cross-Border Payments
Cross-border payments between BRICS countries often involve multiple intermediaries, resulting in higher costs, slower settlement times, and increased operational risk. By linking fast payment systems-such as India's Unified Payments Interface (UPI) or Brazil's Pix-with CBDCs, the group aims to streamline transactions and offer more direct settlement channels. This could benefit businesses engaged in trade, as well as individuals sending remittances or making international purchases.
Earlier this year, Reuters reported that the Reserve Bank of India recommended including CBDC connectivity on the agenda for the 2026 BRICS summit. The RBI has also reiterated its commitment to internationalizing the Indian rupee and encouraging the use of local currencies for cross-border payments. These efforts align with broader trends in the region, where several central banks are piloting or developing digital currencies to modernize payment infrastructure and enhance monetary sovereignty.
AI Governance and Financial System Resilience
Alongside payment system integration, the Reserve Bank of India is urging domestic banks to take a proactive approach to artificial intelligence (AI) governance. Malhotra emphasized that AI should be viewed as a tool to strengthen financial services, not merely as a source of risk. He called on Indian banks to inventory their AI models and establish board-approved governance frameworks, reflecting growing regulatory attention to the operational and cybersecurity risks associated with advanced technologies.
Central banks worldwide are closely monitoring how lenders deploy AI, particularly in light of recent cyberattacks and concerns about model transparency. Malhotra argued that innovation and safety are not mutually exclusive, but rather essential components of a robust financial system. This perspective echoes recent moves by other financial institutions to balance technological advancement with risk management, as seen in India's Small Industries Development Bank's adoption of secure digital financing solutions, highlighted in a recent report on digital invoice validation.
Key Figures and Ongoing Developments
According to the Bank for International Settlements, cross-border payment costs for businesses and individuals in emerging markets can exceed 5% of the transaction value, with settlement times ranging from several hours to multiple days depending on the corridor and payment method. The BRICS countries collectively account for over 40% of the world's population and a significant share of global trade, making improvements in payment efficiency a priority for economic integration. While several BRICS members have launched pilot CBDCs-such as China's digital yuan and Nigeria's eNaira-full interoperability between digital currencies and fast payment systems remains a complex technical and regulatory challenge.
As the BRICS group continues to debate the best path forward, the outcome of these discussions could influence the future of cross-border payments not only within the bloc but also for other emerging markets seeking alternatives to established international payment rails. The next two years will be critical as technical standards, legal frameworks, and governance models are developed and tested ahead of the 2026 summit in India.
Central bank digital currencies (CBDCs) are digital forms of a country's official currency, issued and regulated by the central bank. Unlike cryptocurrencies such as Bitcoin, CBDCs are designed to function as legal tender and are typically backed by the issuing authority. Fast payment systems, meanwhile, enable near-instant transfers between bank accounts, often operating 24/7 and supporting both domestic and, increasingly, cross-border transactions. Integrating these two technologies could allow for real-time, low-cost international payments, but would require careful coordination on standards, security, and regulatory oversight among participating countries.
