RBI Proposes BRICS Digital Currency Linkage to Reduce Dollar Reliance

• The Reserve Bank of India (RBI) has proposed linking BRICS countries' digital currencies to ease cross-border trade and tourism payments.
• This initiative aims to reduce reliance on the U.S. dollar amidst rising geopolitical tensions and could be on the agenda for the 2026 BRICS summit.
• The proposal builds on a 2025 BRICS declaration for interoperability between payment systems and is a first-time suggestion for digital currency linkage.
• BRICS members (Brazil, Russia, India, China, South Africa) are running CBDC pilot projects; India's e-rupee has 7 million retail users.
• Challenges include achieving consensus on interoperable technology, governance rules, and managing trade imbalances, possibly through bilateral forex swap arrangements.

Why It Matters: RBI proposes linking BRICS digital currencies to boost trade, tourism, and reduce dollar dependence.