BRICS member states are exploring plans to connect their central bank digital currencies (CBDCs) and fast payment systems, a move aimed at reducing the cost of cross-border money transfers within the bloc, Reserve Bank of India Governor Sanjay Malhotra said on Tuesday.

Speaking at an event in Mumbai, Malhotra described cross-border payments as a recurring priority for the group. However, he emphasized that discussions remain in their early stages.

"Various options are on the table, but it is still at the discussion stage, including CBDCs and linkages of fast payment systems," Malhotra said.

The governor highlighted cost reduction as the primary motivation: "Cross-border payments is an area of interest for all of us, including the BRICS, because we feel there is a lot of scope for reducing cost."

The cost and friction of cross-border payments has been a long-standing concern for emerging economies, where transfer fees and currency conversion costs can absorb a significant share of remittances and trade settlement amounts. The G20 has identified cross-border payment efficiency as a global priority, and central banks worldwide have been pursuing CBDC pilots and bilateral payment-linkage agreements as part of that effort.

How Linked CBDCs Could Reduce Costs

CBDCs are digital versions of a country's official currency, issued directly by its central bank. Several BRICS members already have CBDC initiatives underway — China's e-CNY is in advanced pilot stages, and the RBI has been running its digital rupee pilot for both wholesale and retail use since late 2022. Brazil, another BRICS member, is also developing its CBDC, Drex.

Establishing interoperability between these digital currencies would allow payments to move more directly between nations, bypassing the multiple layers of intermediaries that traditionally process international transfers and thereby lowering the cost of each transaction.

A linked CBDC payment infrastructure would function differently from conventional channels, with the goal of enabling consumers and businesses to send money abroad more quickly through domestic payment pathways they already use. The concept echoes earlier multi-CBDC experiments such as Project mBridge, a cross-border settlement platform involving the central banks of China, Hong Kong, Thailand, and the UAE, which demonstrated settlement in multiple CBDCs on a shared ledger.

Separately, linking fast payment systems would build on domestic infrastructure already operating in several BRICS countries, including India's UPI and Brazil's Pix, which have together processed billions of transactions and significantly reduced the cost of domestic digital payments.

India's Push to Internationalize the Rupee

Malhotra confirmed that the RBI will continue its efforts to internationalize the Indian rupee and promote the use of local currencies for cross-border trade and payments.

India is hosting this year's BRICS summit, the annual gathering that was originally formed by Brazil, Russia, India, China, and South Africa and has since expanded to include additional members. The RBI had previously requested the Indian government to include a CBDC-linking proposal on the summit's agenda earlier in 2026. India's broader objective of internationalizing its currency is a key driver behind the push to establish CBDC linkages among BRICS nations.

Call for AI Governance in Indian Banks

Separately, Malhotra addressed the use of artificial intelligence by Indian banks and financial institutions. He urged them to catalogue every AI model currently in operation within their organizations and to implement AI governance policies approved by their respective boards. His remarks come as financial regulators globally are developing frameworks to address the risks associated with AI adoption in the financial sector, including model transparency, data privacy, and algorithmic bias.