India Targets USD Dominance With Historic BRICS CBDC Bridge Proposal
The Reserve Bank of India moves to formalize a shared payment rail for the bloc, risking further tariff retaliation from Washington.
The Lead
The Reserve Bank of India (RBI) has formally proposed linking BRICS central bank digital currencies (CBDCs) to bypass the US dollar in cross-border trade. According to Reuters, the RBI recommended placing the interoperability plan on the official agenda for the 2026 BRICS summit, which India hosts later this year.
This isn’t just a whitepaper. It is the first operational step toward a ‘BRICS Bridge’, a payment rail designed to settle trade in local digital currencies. The move directly challenges the SWIFT network and the dollar’s hegemony. Washington’s reaction? Likely explosive.
The Institutional Context
The geopolitical stakes are high. President Donald Trump has already flagged the bloc’s de-dollarization efforts as an economic threat. In late 2024, Trump threatened 100% tariffs on BRICS nations if they attempted to replace the greenback. By July 2025, he doubled down with threats of a blanket 10% tariff on member states.
India’s proposal forces a confrontation. If accepted, the system would allow a Brazilian exporter to be paid in digital real, which instantly converts to digital rupees for an Indian importer. No dollars. No correspondent banks.
The Data: e-Rupee Struggle
Adoption remains the bottleneck. While the RBI pushes for a global grid, domestic traction is still in the pilot phase. As of today, India’s e-rupee (e₹) has accrued approximately 7 million retail users since its December 2022 launch. Compare that to India’s UPI system, which processes billions of transactions monthly, and the gap is obvious.
China’s digital yuan is further ahead, but the other core members, Brazil, Russia, and South Africa, are still in various stages of testing. A shared grid requires more than political will; it demands technical parity.
The Technical Hurdle
Interoperability is the primary failure point. The proposal must solve for:
- Governance: Who controls the switch?
- Liquidity: How to settle trade imbalances (e.g., India buying far more oil from Russia than vice versa).
- Trust: Sharing ledger access with rival nations.
“One idea being explored to manage potential trade imbalances is the use of bilateral foreign exchange swap arrangements between central banks,” an official told Reuters.
The 2026 BRICS summit in India will determine if this proposal survives the drafting room.
