Why is BRICS exploring its own cross-border payment links?
Can linking national payment systems make trade cheaper without a showdown over the dollar?
Published 6 September 2026. Written by Pratidin from the reports linked at the end; every fact checked by a separate review before publishing. How we work
India hosts the 18th BRICS Summit in New Delhi on 12 and 13 September 2026, and faster, cheaper cross-border payments are one of its finance priorities. The Reserve Bank of India (RBI) has recommended that proposals to link members' central bank digital currencies (CBDCs) be placed on the summit agenda. A CBDC is the digital form of a country's official currency, issued by its central bank; the RBI is itself running a CBDC pilot. RBI Governor Sanjay Malhotra has said that cross-border payments are 'an area of interest for all of us' and that 'there is a lot of scope for reducing cost'. Reports say the discussions on digital currencies, payment systems and national currency settlement will not be targeted against any other country.
Most cross-border payments today move through correspondent banks, which hold accounts with each other in different countries, and rely on SWIFT, a member-owned cooperative founded in 1973 and headquartered in Belgium that carries secure payment messages among over 11,000 financial institutions. The G20 launched a roadmap in 2020 to tackle four problems in such payments: high cost, low speed, limited access and insufficient transparency. BRICS has been exploring its own options. The Kazan Declaration of October 2024 welcomed the use of local currencies in transactions among members, backed strengthening correspondent banking networks within BRICS for settlements in local currencies, and agreed to study the feasibility of BRICS Clear, an independent cross-border settlement and depository system.
Existing experiments show both promise and limits. Project mBridge is a shared platform on which central banks exchange CBDCs; its founding members are the central banks of China, Hong Kong, Thailand and the UAE, Saudi Arabia joined in 2024, and the Bank for International Settlements (BIS) handed the project to its partners in October 2024. Project Nexus, which India joined, aims to connect national instant payment systems such as UPI in a standard way; in 2025 six central banks including the RBI set up Nexus Global Payments to take it live. The obstacles are real: CBDCs are still little used, trade imbalances between members would need currency swap arrangements, and political frictions within an expanded bloc make deep financial integration hard.
Prelims facts
- The 18th BRICS Summit is being held in New Delhi on 12 and 13 September 2026 under India's chairship.
- The Kazan Declaration (October 2024) agreed to study the feasibility of BRICS Clear, an independent cross-border settlement and depository system.
- Project mBridge is a multi-CBDC platform whose founding members are the central banks of China, Hong Kong, Thailand and the UAE; the BIS handed it to the partners in October 2024.
- SWIFT, founded in 1973 and headquartered in Belgium, is a secure messaging network linking over 11,000 financial institutions; it does not itself hold or move money.
- In 2025 the central banks of India, Indonesia, Malaysia, the Philippines, Singapore and Thailand set up Nexus Global Payments to take Project Nexus live.
Quick recall
- Dates and venue of the 18th BRICS Summit
- 12 and 13 September 2026, New Delhi.
- What is a CBDC?
- A central bank digital currency: the digital form of a country's official money, issued by its central bank.
- Where is SWIFT headquartered and when was it founded?
- Belgium (La Hulpe); 1973.
- What is BRICS Clear?
- A proposed independent cross-border settlement and depository system; Kazan (2024) agreed to study its feasibility.
- Founding central banks of Project mBridge
- China, Hong Kong, Thailand and the UAE; Saudi Arabia joined in 2024.
- When did the BIS hand mBridge over to its partners?
- October 2024.
- What does Project Nexus connect?
- Domestic instant payment systems of different countries, in a standardised way.
- Four challenges named in the G20 cross-border payments roadmap
- High cost, low speed, limited access and insufficient transparency.
Prelims practice question
'Project mBridge', recently seen in the news, refers to:
- an undersea data cable linking BRICS countries
- a shared platform on which central banks exchange central bank digital currencies
- an infrastructure fund of the New Development Bank
- a bilateral link between India's UPI and Singapore's PayNow
Show answer
Answer: (b) a shared platform on which central banks exchange central bank digital currencies. mBridge is a multi-CBDC platform built on distributed ledger technology and shared among participating central banks and commercial banks. Its founding members are the central banks of China, Hong Kong, Thailand and the UAE; Saudi Arabia joined in 2024. The BIS handed it over to the partners in October 2024.
Use this in UPSC Mains: previous-year questions
Recurring theme: BRICS as a Global South grouping and its financial cooperation, including payments and local currencies
- How to use this
Use BRICS payment initiatives as a concrete way the group tries to offer alternatives to existing financial arrangements, while noting India frames them as efficiency, not opposition.
- The Kazan Declaration (October 2024) welcomed local currency settlement among members and agreed to study BRICS Clear, an independent cross-border settlement and depository system.
- Ahead of the 18th BRICS Summit in New Delhi (12 and 13 September 2026), the RBI recommended linking members' CBDCs; reports say the talks are not targeted against any other country.
- Limits: CBDCs are little used, trade imbalances would need currency swap arrangements, and political frictions in an expanded bloc hinder deep integration.
- How to use this
Use local currency settlement and payment-system links as measures India can adopt to reduce exposure to external currency and trade shocks.
- BRICS members want payment channels that cannot be easily disrupted by others' decisions; the Kazan Declaration (2024) backed local currency settlement and stronger intra-BRICS correspondent banking.
- India joined Project Nexus to link instant payment systems such as UPI; in 2025 six central banks including the RBI set up Nexus Global Payments to take it live.
- Keep payment links bilateral or modular so that India controls its exposure to any single partner, and avoid being drawn into a bloc currency.
The Kazan summit of 2024, where BRICS agreed to study BRICS Clear, is the same summit this question tests.
The New Development Bank (headquartered in Shanghai) is BRICS's earlier financial institution; payments cooperation is the next layer.
Mains practice question
Discuss the rationale and the challenges of BRICS efforts to build alternative cross-border payment arrangements. What approach should India take as chair? (250 words)
Model answer
Cross-border payments are costly and slow because they pass through chains of correspondent banks and depend on a few currencies. Ahead of the 18th BRICS Summit in New Delhi (12 and 13 September 2026), India's RBI has pushed for linking members' central bank digital currencies (CBDCs).
Rationale
- Cost and speed: the G20 roadmap of 2020 names high cost, low speed, limited access and poor transparency as the four problems in cross-border payments.
- Local currencies: the Kazan Declaration (2024) welcomed settlement in local currencies and stronger correspondent banking within BRICS.
- Resilience: members want payment channels that cannot be easily disrupted by others' decisions.
- Technology: India's UPI and its role in Project Nexus show that linking fast payment systems is workable.
Challenges
- Low use of CBDCs outside pilots.
- Trade imbalances among members would need currency swap arrangements.
- Political frictions within an expanded bloc limit trust.
- Concentration risk: on mBridge, one large economy's currency could dominate.
- BRICS Clear is still only under feasibility study.
India's approach
- Frame the agenda as efficiency and lower cost, as the RBI Governor has done.
- Start with interoperability of fast payment systems and voluntary local currency settlement.
- Keep links bilateral or modular so that India controls exposure to any single partner.
- Build on Project Nexus and UPI links with individual countries.
- Align BRICS work with the G20 cost and speed targets.
A pragmatic, interoperability-first approach lets India gain cheaper payments for its trade without being drawn into a bloc currency it does not want.
The basics
Why this matters
When an Indian importer pays a supplier in Brazil, the money rarely travels directly. It hops through banks in other countries and is usually converted through a third currency. Each hop adds cost and delay. BRICS, which India chairs in 2026, is exploring ways to shorten this chain. The topic joins GS2 (groupings) and GS3 (payments, currencies and external sector).
How a payment travels today
A typical payment uses Correspondent banking and SWIFT: banks that hold accounts with each other, and a messaging network that tells them what to do.
- 1Payer's bankThe importer's bank receives the instruction and debits the importer
- 2Message sentA secure SWIFT message goes to the next bank in the chain
- 3Correspondent banksOne or more banks holding accounts with each other pass the funds along
- 4Currency conversionFunds are converted, often through a widely used third currency
- 5Beneficiary's bankThe supplier's bank credits the supplier's account
Four routes to faster payments
The options on the BRICS table differ in how ambitious they are.
- 1Local currency settlementTrade settled in members' own currencies through stronger correspondent banking, as backed at Kazan in 2024
- 2Linking fast payment systemsConnecting systems such as UPI across borders, the approach of Project Nexus
- 3CBDC bridgesCentral banks exchanging digital currencies on a shared platform, as in Project mBridge
- 4BRICS ClearA proposed independent settlement and depository system, still under feasibility study
Where the pieces stand
A Central bank digital currency is the digital form of official money. Project mBridge shows that central banks can swap such currencies directly, while Project Nexus links instant payment systems instead.
- 1973SWIFT founded as a member-owned cooperative in Belgium
- 2020G20 launches its roadmap for enhancing cross-border payments
- October 2024Kazan Declaration backs local currency settlement and a study of BRICS Clear; the BIS hands mBridge to its partners
- 2025Six central banks, including the RBI, set up Nexus Global Payments
- September 202618th BRICS Summit in New Delhi under India's chairship
Go deeper
In one line: BRICS members want cheaper and faster payments among themselves, and India, as 2026 chair, is pushing links between central bank digital currencies and payment systems rather than a common currency.
Why it matters for UPSC
BRICS is a regular Prelims and Mains topic, and payment systems link it to GS3 themes: the external sector, the rupee and digital public infrastructure. UPSC asked about BRICS in both 2025 Prelims and 2026 Mains.
The core idea
Today's payments run through Correspondent banking and SWIFT, which is slow and costly. Three newer tools could shorten the chain. A Central bank digital currency lets a central bank issue money in digital form. Project mBridge lets central banks exchange such currencies on a shared platform. Project Nexus connects instant payment systems such as UPI. BRICS has so far agreed to study options, including BRICS Clear, rather than build one system.
Numbers and dates to remember
- 12 and 13 September 2026: 18th BRICS Summit, New Delhi
- October 2024: Kazan Declaration; BIS hands mBridge to partners
- 1973: SWIFT founded; over 11,000 institutions connected
- 2020: G20 cross-border payments roadmap
- 2025: Nexus Global Payments set up by six central banks including the RBI
Where to go next
- Correspondent banking and SWIFT: how money crosses borders today
- Central bank digital currency: official money in digital form
- Project mBridge: central banks swapping digital currencies
- Project Nexus: linking instant payment systems across countries
Go deeper: efficiency or de-dollarisation?
There are two ways to read the BRICS payments agenda. The first is technical. The G20 itself recognises that cross-border payments suffer from high cost, low speed, limited access and poor transparency. Linking payment systems, as Project Nexus does, or letting central banks exchange digital currencies, as Project mBridge does, can cut hops out of the chain described in Correspondent banking and SWIFT. India's framing, through RBI Governor Sanjay Malhotra, is of this kind: scope for reducing cost.
The second reading is geopolitical. Some members see alternatives to Western-run channels as insurance against sanctions and disruption. The Kazan Declaration's language on local currencies and BRICS Clear reflects that interest, but it stops well short of a common currency.
The obstacles cut across both readings. A Central bank digital currency is still mostly at pilot stage, including in India. Trade among members is unbalanced, so a country running a surplus accumulates currencies it may not want, which is why swap arrangements come up. On a shared platform, the largest economy's currency can dominate, a concern for India given its caution about financial dependence on any single partner. The expanded membership also brings political frictions between some members.
For India the balanced course is interoperability first: link fast payment systems, allow voluntary local currency settlement, and keep arrangements modular. That gains cheaper trade payments while avoiding commitments that could clash with its other economic partnerships.
Correspondent banking and SWIFT
How money crosses borders today
In one line: Most cross-border payments pass through chains of correspondent banks that hold accounts with each other, coordinated by SWIFT messages.
Correspondent banking
A bank that has no branch abroad keeps an account with a bank in another country, called a correspondent. A payment may pass through several such banks before reaching the recipient, and each step adds cost and time.
SWIFT
SWIFT is a member-owned cooperative founded in 1973 and headquartered in La Hulpe, Belgium. It connects over 11,000 financial institutions and carries secure payment messages. It does not hold or move money itself; the banks do that on the basis of its messages. It is overseen by central banks including the National Bank of Belgium.
Why it is in the news
BRICS proposals aim to shorten or bypass these chains for trade among members.
Where to go next
Central bank digital currency
Official money in digital form
In one line: A central bank digital currency (CBDC) is the digital form of a country's official currency, issued by and a liability of its central bank.
How it differs
Money in a bank account is a claim on a commercial bank. A CBDC is a claim on the central bank itself, like cash, but in digital form. It is different from private cryptocurrencies, which no central bank issues or backs.
Why it is in the news
The RBI is running a CBDC pilot and has recommended that proposals to link BRICS members' CBDCs be on the agenda of the 2026 New Delhi summit. Governor Sanjay Malhotra has spoken of 'a lot of scope for reducing cost' in cross-border payments.
Where to go next
Project mBridge
Central banks swapping digital currencies
In one line: Project mBridge is a multi-CBDC platform, built on distributed ledger technology, that lets participating central banks and commercial banks settle cross-border payments in digital currencies.
Members and history
Its founding members are the Bank of Thailand, the Central Bank of the UAE, the Digital Currency Institute of the People's Bank of China and the Hong Kong Monetary Authority. The Saudi Central Bank joined in 2024. The project reached the minimum viable product stage in mid-2024, and in October 2024 the Bank for International Settlements announced it was handing the project over to the partners.
Why it matters for BRICS
It is the most advanced example of a CBDC bridge, and a model often cited in BRICS discussions. Its membership also shows the risk of one large economy's currency dominating.
Where to go next
Project Nexus
Linking instant payment systems across countries
In one line: Project Nexus aims to make cross-border payments faster, cheaper and more transparent by connecting countries' domestic instant payment systems in one standard way.
How it works
Instead of building a separate link between every pair of countries, each country's fast payment system connects once to Nexus and can then reach all the others. It began as a project of the Bank for International Settlements Innovation Hub.
India's role
In 2025 the central banks of India, Indonesia, Malaysia, the Philippines, Singapore and Thailand set up a new entity, Nexus Global Payments, to take Nexus to live operation. For India this is a route to connect UPI with other systems.
Why it matters for BRICS
It shows the interoperability-first approach that India prefers over new currencies.
Where to go next
Take the 6 September 2026 quiz: 30 Prelims-style questions with answers