The Reserve Bank of India promotes the BRICS central bank digital currency connection plan, aiming to replace the dominance of the US dollar

The Reserve Bank of India (RBI) is advancing an ambitious initiative to establish a central bank digital currency (CBDC) interconnection system among BRICS countries. This move aims to gradually weaken the dollar’s monopoly in international trade through digital currency koppeling, while simplifying cross-border transactions between member countries. According to multiple sources familiar with the matter, the RBI has proposed to the government to include this CBDC connectivity plan on the agenda of the 2026 BRICS summit, which will be hosted by India.

Strategic Significance of Digital Currency Interconnection

If implemented, this plan will be the first formal attempt by a BRICS country to establish a koppeling mechanism between central bank digital currencies. BRICS members include Brazil, Russia, India, China, South Africa, and emerging partner countries such as the United Arab Emirates, Iran and Indonesia. By building an interconnected network, these countries can conduct trade and tourism transactions without relying on the dollar, gradually weakening the dependence of traditional international payment systems on the dollar.

The RBI believes that CBDC connectivity can significantly improve the business environment within BRICS. A unified digital payment system will eliminate exchange costs, accelerate capital flows, and bring more efficient financial services to enterprises and consumers. This new koppeling model represents a new approach to international financial cooperation, distinct from the traditional system centered on dollar settlement.

The US dollar monopoly faces serious challenges

BRICS’s move to promote central bank digital currency connectivity directly touches on the central bank’s central position as a global reserve currency. US President Donald Trump has repeatedly warned BRICS countries not to try to replace the US dollar and threatened to impose 100% import tariffs on related measures. The Trump administration has imposed 50% tariffs on Indian goods, including up to 25% on Russian crude oil imports.

While these threats are intended to prevent the advancement of CBDC connectivity, BRICS countries continue to push for digital currency projects. India’s e-Rupee has attracted around 7 million retail users since its launch in December 2022. China’s digital yuan is also steadily expanding internationally and allowing commercial banks to pay interest on digital yuan holders. These developments demonstrate that despite external pressures, countries’ determination to replace the dollar’s dominance remains unwavering.

Trade conflicts exacerbate geopolitical divisions

The deterioration of trade relations between the United States and India has further exacerbated the situation. The Trump administration’s high tariff policies have dealt a significant blow to Indian exports, particularly textiles, gemstones and chemicals exported to the United States. The US-India trade talks, which were scheduled to be completed in the middle of last year, finally broke down when Indian Prime Minister Narendra Modi temporarily canceled a conference call with Trump. Although the two sides held a new round of negotiations on January 13, no substantive progress has been made.

Against this backdrop, the timing of the RBI’s launch of the CBDC connectivity program is particularly sensitive. This is both an economic consideration and a geopolitical response. By promoting financial integration in BRICS countries, India is trying to find alternative export markets and financing channels in trade conflicts, thereby reducing its dependence on the US market.

Market reactions are volatile, and asset prices are under pressure

At the same time, global financial markets have reacted significantly to these geopolitical changes. Bitcoin price (BTC prijs) fell rapidly in early US trading, reaching a low of $85,200, a new low since 2026. Real-time data shows that Bitcoin’s current price is $85.08K, with a 24-hour drop of 5.31%. This price drop coincided with a change in the precious metals market, where gold prices briefly broke through $5,600 and then quickly fell back to $5,200. The Nasdaq also fell sharply by 1.5%, and Microsoft’s stock price fell more than 11% after announcing its fourth-quarter earnings report.

The fluctuations in asset prices reflect market concerns about potential changes in the global financial order. If the BRICS central bank digital currency connection is truly launched, it will disrupt the existing international payment landscape, which in turn will affect cross-border capital flows, exchange rate stability and demand for US dollar assets. Investors’ wait-and-see mentality is driving a pullback in risk assets, including crypto assets.

Future Trend and Risk Assessment

Whether this initiative by the RBI can become a reality depends on several factors. First, BRICS countries need to reach consensus on technical standards, regulatory frameworks, and implementation timelines; second, international political pressure and the threat of sanctions may become the main obstacles in the implementation process; Thirdly, the stability and security of CBDC koppeling need to be fully technically verified.

Despite the challenges, the intention of BRICS countries to advance central bank digital currency connectivity is clear. This restructuring of the financial system is quietly underway, and its end result could profoundly change the way global trade is settled, as well as the long-standing monopoly of the dollar. In the process, market volatility will become the norm, and investors will need to pay close attention to relevant developments and the long-term impact of alternatives to the US dollar.