Why is BRICS exploring cross-border payments? |Explained
BRICS nations are exploring new cross-border payment mechanisms, including CBDCs, to reduce reliance on the US dollar and the SWIFT messaging system. The initiative aims to facilitate direct trade settlements between member countries using national currencies.
Why it matters
This shift represents a significant geopolitical effort to decentralize global finance and reduce the influence of Western-led financial infrastructure.
The 18th BRICS summit in New Delhi to be held in September , with India as the Chair, is expected to push for mechanisms to facilitate cross-border payments between members, including links between digital payment systems and central bank digital currencies (CBDCs), according to a report in The Hindu businessLine . Ahead of the summit, finance ministries’ and central bank representatives from BRICS countries met in Jaipur on August 12-13 to discuss financial cooperation, payments, and the wider use of national currencies in settling trade between members.
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