Can BRICS bridge the gap with fast-payment systems and digital currencies?

With less than a month remaining until the BRICS summit in India, the focus has shifted sharply toward a critical proposal aimed at reshaping international finance: the integration of fast-payment systems and digital currencies among the group’s five founding members, Brazil, Russia, India, China, and South Africa. This initiative, championed by India as the current host, represents more than just a technological challenge. It is being viewed as a litmus test for whether BRICS can transform its longstanding vision of a multipolar financial system into tangible, operational infrastructure. Currently, cross-border transactions within BRICS nations often rely on U.S.-based banking systems, which can take several days to process and incur transaction fees ranging from 3 to 5 percent. The proposed system aims to eliminate these intermediaries by enabling direct, near-instant settlements in local currencies, using blockchain-like technology to ensure simultaneous payments. This approach would not replace any national currency but rather enable them to communicate seamlessly with one another. The significance of this move lies in its potential to reduce dependency on the U.S. dollar and insulate BRICS economies from external shocks. India’s interest in this proposal is particularly acute. In April 2025, the country surpassed Japan to become the world’s fourth-largest economy. However, by the following year, it had fallen to sixth place, overtaken by both Japan and the United Kingdom. India’s nominal GDP stood at approximately $3.92 trillion, below initial forecasts of $4.18 trillion. This decline was attributed to the Indian rupee’s depreciation against the U.S. dollar, exacerbated by geopolitical tensions in the Middle East. Since the escalation of the U.S.-Iran conflict in late February 2026, the rupee has dropped nearly 5 percent against the dollar, reaching a record low of ₹96 by mid-May. As the International Monetary Fund (IMF) measures GDP in U.S. dollars, a weaker rupee directly impacts India’s ranking. The challenges faced by India are reflective of broader vulnerabilities within the BRICS bloc. All member states are heavily reliant on the U.S. dollar for energy trade and financial infrastructure. Fluctuations in the Middle East have led to increased oil prices, capital flight, and currency depreciation across the region. Russia, for instance, is isolated from the SWIFT system due to sanctions, while China experiences rising manufacturing costs and diminished export competitiveness during periods of high oil prices. Countries such as Brazil, South Africa, Egypt, and Ethiopia struggle with dollar shortages and unstable exchange rates. These shared vulnerabilities underscore the urgency of the proposed payment system interconnectivity. The ongoing conflict has revealed a core issue: despite their ambitions, BRICS nations remain constrained by a financial framework beyond their control. A multi-central bank digital currency (CBDC) bridge or interconnected fast-payment systems could provide a solution by allowing direct settlements in local currencies, thereby circumventing the need for the U.S. dollar as an intermediary. This would shield member states from the type of currency-related ranking issues that recently affected India. The proposal is distinct from the notion of a unified BRICS currency, which has sparked internal divisions and prompted concerns from Western governments regarding potential economic shifts. Instead, the emphasis is on achieving functional de-dollarization through the creation of alternative infrastructure. This would enable BRICS nations to maintain trade continuity even during future crises, preventing sudden drops in their GDP rankings. Global financial analysts are closely monitoring developments. The U.S. Treasury has voiced private concerns, while the IMF has extended technical support, maintaining a cautious stance. Should BRICS successfully implement this plan, it might encourage other regional groups, such as ASEAN and the Gulf Cooperation Council, to pursue similar initiatives, potentially hastening a gradual transition away from a dollar-dominated financial landscape.