How BRICS Is Shaping Global Finance with Digital Payment Systems

By Phapano Phasha

With only a few weeks left before BRICS leaders meet in India, one proposal has become the most important, and possibly the most difficult, agenda item of the summit: connecting the countries' fast-payment systems and their digital currencies (CBDCs).

Proposed by India as this year's BRICS host, this is no longer just a technical suggestion. It has become the sharpest measure yet of whether BRICS can convert its long-declared ambition for a multipolar financial order into concrete, working infrastructure, or whether the gap between statement and substance will once again prove decisive.

The proposal in plain terms

Simply put, BRICS nations want to build a digital bridge between their domestic payment networks. Today, if Brazil wants to pay South Africa for goods, that money often travels through US banks, takes days to clear, and incurs fees of 3–5%.

The proposed system would allow direct, near-instant settlements in local currencies, using blockchain-like technology to ensure both sides get paid simultaneously, without a middleman. No single currency is replaced; instead, each nation's digital money learns to "speak" to the others.

But why does this matter so much to India? And what is at stake for each BRICS member?

For India: in April 2025, India overtook Japan to become the world's fourth-largest economy. One year later, it has slipped to sixth place, behind both Japan and the United Kingdom. India's nominal GDP stood at roughly $3.92 trillion, down from earlier projections of $4.18 trillion.

What changed was not India's economic fundamentals — the International Monetary Fund (IMF) reports that India remains the world's fastest-growing major economy. The culprit was the rupee's slide against the US dollar amid conflict in the Middle East.

Since the outbreak of the US-Iran war in late February 2026, the rupee has depreciated by nearly 5% against the dollar, breaching ₹96 by mid-May, a record low. Because IMF rankings measure nominal GDP in dollars, a weaker rupee mechanically shrinks India's dollar-denominated GDP. The IMF itself explicitly cited the rupee's continuous depreciation, caused by the Middle East situation, as the reason for the downgrade.

The BRICS dilemma: A shared vulnerability

India's predicament is not unique — it is a warning to every BRICS member. The bloc is disproportionately exposed to dollar-denominated energy trade and US financial infrastructure. When Middle East tensions spike, every BRICS economy feels the shock through higher oil prices, capital outflows, and currency depreciation.

Russia faces sanctions that cut it off from SWIFT. China sees higher manufacturing costs and reduced export competitiveness when oil rises. Brazil, South Africa, Egypt and Ethiopia all grapple with dollar shortages and currency volatility.

This is precisely why the payment-system interconnectivity proposal, tabled by India, has taken on such urgent weight. The war has exposed a fundamental truth: BRICS nations remain captive to a financial system they do not control.

A multi-CBDC bridge, or linked fast-payment rails, would allow direct settlements in local currencies, bypassing the dollar as an intermediary — shielding members from the kind of currency-driven ranking dilemma India has just endured.

Critically, this is not about a common BRICS currency, an idea that has divided the bloc and drawn US tariff threats. It is about functional de-dollarisation: building alternative infrastructure so that when the next crisis hits, BRICS nations can keep trading without watching their GDP rankings evaporate overnight.

What the West is saying

As the countdown ticks away, global financial observers are paying close attention. The US Treasury has privately expressed concern, while the IMF has offered technical assistance, hedging its bets. If BRICS succeeds in building this bridge, it could inspire similar blocs — ASEAN, the Gulf Cooperation Council — to follow suit, accelerating a slow but steady shift away from dollar-centric global finance.

If it fails, or if the summit produces only vague promises, that will reinforce the view that BRICS is a talk shop, not a true coalition. Member nations are acutely aware of this perception, which is precisely why the payment agenda, despite its technical challenges, carries such heavy political weight.

A payment system does not carry the political baggage of a common BRICS currency, which would openly challenge the dollar and invite US retaliation. Instead, India frames this as "functional efficiency," not "confrontational de-dollarisation."

With days to go before the summit, the payment agenda is no longer just a technical discussion. It is a test of whether BRICS can translate shared vulnerability into a shared solution. India's fall from fourth to sixth place is not an aberration; it is a preview of the crisis confronting the Global South. The question is whether the bloc will act before the next crisis writes an even starker lesson.

The proposal itself is not a formal treaty but a "discussion paper" submitted by the RBI, with input from China's digital yuan team and Russia's finance ministry. It will be tabled as a non-binding declaration during the summit's financial track, with a mandate for a joint working group to produce interoperability standards within 18 months. No timeline for a live pilot has been set — deliberately, to keep the US and EU from viewing it as an immediate challenge to the dollar's hegemony.

A functional BRICS payment link could, of course, ease balance-of-payments pressure overnight, provided members can meet the technical and regulatory standards required. But the symbolism is unmistakable: BRICS is moving from rhetoric to infrastructure.

Yet, for all the rupee's bruises and the GDP ranking slip, India arrives at the summit table not as a victim, but as a tactician. It is precisely this crisis that has sharpened New Delhi's diplomatic edge. Hosting the BRICS summit in the wake of a Middle East war that directly devalued its currency could have been a diplomatic nightmare. Instead, India has turned it into a strategic opportunity, offering a solution that serves every member's self-interest without demanding they choose sides.

Russia gets its sanctions workaround. China gets a testing ground for the digital yuan. Brazil and South Africa get de-dollarisation without the political fireworks. Egypt and Ethiopia get relief from the dollar famine their countries face.

This is classic Indian diplomacy: pragmatic, non-confrontational and quietly ambitious. The message from New Delhi is clear — BRICS does not need to shout about replacing the dollar; it needs to quietly build the infrastructure.

In this sense, India's fall from fourth to sixth place is not the story of the summit — its response to that fall is. By convening a divided bloc, offering a unifying agenda and resisting the urge to grandstand, India has shown that its influence extends far beyond its GDP ranking.

The rupee may have dipped, but India's geopolitical currency is soaring. India is reminding the world that in a multipolar era, diplomatic prowess can outweigh even the mighty dollar's pull, without a single confrontational word.

Phapano Phasha is the chairperson of The Centre for Alternative Political and Economic Thought.

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