{"id":372027,"date":"2026-09-17T17:49:14","date_gmt":"2026-09-17T12:19:14","guid":{"rendered":"https:\/\/forumias.com\/blog\/?p=372027"},"modified":"2026-09-17T17:49:14","modified_gmt":"2026-09-17T12:19:14","slug":"brics-and-the-future-of-cross-border-payments","status":"publish","type":"post","link":"https:\/\/forumias.com\/blog\/brics-and-the-future-of-cross-border-payments\/","title":{"rendered":"BRICS, and the future of cross-border payments"},"content":{"rendered":"

Source: <\/strong>The post \u201cBRICS, and the future of cross-border payments\u201d <\/strong>has been created based on “BRICS, and the future of cross-border payments\u201d<\/strong> published in \u201cBusiness Line<\/strong>\u201d on 17th September 2026.<\/p>\n

UPSC Syllabus:\u00a0 <\/strong>GS Paper 2- International Relations<\/p>\n

Context:<\/strong> BRICS has been working towards greater use of national currencies and improved cross-border payment mechanisms since the Ufa Declaration of 2015<\/strong>. A Payment Task Force of BRICS central banks was established in 2020<\/strong>, and the initiative was formally called the BRICS Cross-Border Payments Initiative at the Kazan Summit in 2024<\/strong>. India has consistently maintained that it is not pursuing de-dollarisation or a common BRICS currency<\/strong>.<\/p>\n

Reason behind Cross-Border Payments gaining importance<\/strong><\/h2>\n
    \n
  1. The importance of efficient cross-border payments has increased because intra-BRICS exports reached $1.17 trillion in 2024<\/strong>, which was 13 times their level in 2003.<\/li>\n
  2. India’s trade with BRICS countries crossed $417 billion in FY26<\/strong>, although India recorded a trade deficit of about $226 billion<\/strong>.<\/li>\n
  3. Cross-border payments continue to face delays because of correspondent banking chains, different time zones, batch processing and largely manual compliance checks<\/strong>.<\/li>\n
  4. According to the Financial Stability Board’s 2025 report, fewer than 45 per cent of global B2B payments were credited within one business day<\/strong>, highlighting the need for faster systems.<\/li>\n
  5. BRICS countries now have large-scale domestic fast-payment systems such as UPI in India, Pix in Brazil, SBP in Russia, QRIS in Indonesia and Aani in the UAE<\/strong>, creating a technological base for interoperability.<\/li>\n<\/ol>\n

    Major Developments<\/strong><\/h2>\n
      \n
    1. The New Delhi Declaration<\/strong> encourages interoperability of payment and messaging channels and greater settlement of trade in local currencies while respecting the national priorities of member countries.<\/li>\n
    2. The Declaration recognises that there is no one-size-fits-all approach<\/strong> to cross-border payments and does not establish a common BRICS payment system or common settlement currency.<\/li>\n
    3. The proposed Russian settlement and depositary infrastructure has remained at the technical workshop stage rather than becoming a formal decision<\/strong>.<\/li>\n
    4. The Jaipur Consensus<\/strong> has proposed studying an invoice-discounting mechanism to support MSME exporters.<\/li>\n
    5. The BRICS Multilateral Guarantees initiative<\/strong> is moving towards pilot transactions, which can facilitate cross-border trade.<\/li>\n
    6. The New Development Bank<\/strong> has been encouraged to expand its lending in local currencies.<\/li>\n<\/ol>\n

      Opportunities for India<\/strong><\/h2>\n
        \n
      1. Greater interoperability can make cross-border payments faster, cheaper and more transparent<\/strong> for Indian businesses and individuals.<\/li>\n
      2. International expansion of UPI connectivity<\/strong> can strengthen India’s position in the global digital-payment ecosystem.<\/li>\n
      3. Faster payments can particularly benefit MSME exporters by improving their cash flows and reducing payment-related delays<\/strong>.<\/li>\n
      4. Direct connectivity between payment systems can reduce dependence on multiple correspondent banking intermediaries<\/strong>.<\/li>\n
      5. Local-currency settlement can facilitate bilateral trade where suitable mechanisms exist for managing accumulated currency balances.<\/li>\n
      6. The growth of cross-border payments can create opportunities for Indian banks and regulated fintech companies<\/strong> to develop innovative payment solutions.<\/li>\n
      7. Common technical standards among BRICS countries can make cross-border transactions more accessible, secure and transparent<\/strong>.<\/li>\n<\/ol>\n

        Challenges<\/strong><\/h2>\n
          \n
        1. BRICS countries have different regulatory frameworks, currency-convertibility regimes, payment infrastructures and financial systems<\/strong>, making a single common system difficult.<\/li>\n
        2. Unequal trade balances can create difficulties in local-currency settlement because one country may accumulate large balances of another country’s currency.<\/li>\n
        3. India’s experience with rupee settlement for Russian oil<\/strong> demonstrated this problem when surplus rupees accumulated faster than they could be utilised.<\/li>\n
        4. Cross-border payments involve different requirements for KYC, settlement, reporting, data sharing and compliance<\/strong>, which require coordination between countries.<\/li>\n
        5. Retail payments between travellers and consumers, exporter payments and central-bank settlements involve different participants, risks and technical requirements<\/strong> and therefore cannot necessarily be addressed through one mechanism.<\/li>\n
        6. Wholesale transactions between central banks may require specialised systems such as CIPS and mBridge<\/strong>, rather than retail fast-payment platforms.<\/li>\n
        7. Geopolitical factors, including Russia’s exclusion from SWIFT after 2022<\/strong>, add complexity to discussions on alternative payment arrangements.<\/li>\n<\/ol>\n

          Way Forward<\/strong><\/h2>\n
            \n
          1. BRICS should adopt a bilateral and layered approach<\/strong> rather than attempting to immediately establish one common payment system.<\/li>\n
          2. BRICS countries should develop common standards for messaging formats, QR interoperability, data exchange, security and dispute resolution<\/strong>.<\/li>\n
          3. Domestic fast-payment systems should be connected where there is sufficient trade volume, regulatory compatibility and mutual trust<\/strong>.<\/li>\n
          4. India’s UPI-PayNow linkage with Singapore<\/strong> provides an example of how bilateral payment connectivity can be developed.<\/li>\n
          5. The proposed UPI-Aani linkage with the UAE and QRIS-UPI linkage with Indonesia<\/strong> can further expand India’s international payment connectivity.<\/li>\n
          6. Local-currency settlement should be accompanied by mechanisms that provide productive avenues for surplus currency balances<\/strong>, including appropriate investment options.<\/li>\n
          7. Regulators should establish common safeguards while allowing banks and fintech companies to compete on speed, cost and transparency<\/strong>.<\/li>\n
          8. India can build on its 2023 framework for cross-border payment aggregators<\/strong>, which provides regulatory requirements relating to KYC, settlement and reporting.<\/li>\n
          9. The New Development Bank can play a greater role in local-currency lending<\/strong>, thereby supporting trade and investment among member countries.<\/li>\n<\/ol>\n

            Conclusion: <\/strong>The future of BRICS cross-border payments is likely to depend more on interoperability, common standards and bilateral connectivity than on the creation of a common currency<\/strong>. BRICS can provide a broad common template while allowing individual countries to develop arrangements according to their specific economic and regulatory conditions<\/strong>. The ultimate measure of progress would be whether an Indian exporter can receive payment from a buyer in another BRICS country as quickly, cheaply and transparently as from a domestic customer<\/strong>.<\/p>\n

            Question: <\/strong>BRICS is moving towards greater interoperability in cross-border payments without pursuing a common currency. Discuss the opportunities, challenges and the way forward for India.<\/p>\n

            Source: <\/strong>Business Line<\/strong><\/a><\/p>\n","protected":false},"excerpt":{"rendered":"

            Source: The post \u201cBRICS, and the future of cross-border payments\u201d has been created based on “BRICS, and the future of cross-border payments\u201d published in \u201cBusiness Line\u201d on 17th September 2026. UPSC Syllabus:\u00a0 GS Paper 2- International Relations Context: BRICS has been working towards greater use of national currencies and improved cross-border payment mechanisms since the… Continue reading BRICS, and the future of cross-border payments<\/span><\/a><\/p>\n","protected":false},"author":10320,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"jetpack_post_was_ever_published":false,"footnotes":""},"categories":[1230],"tags":[12044,212,239],"class_list":["post-372027","post","type-post","status-publish","format-standard","hentry","category-9-pm-daily-articles","tag-business-line","tag-gs-paper-2","tag-international-relations","entry"],"jetpack_featured_media_url":"","views":"","jetpack_sharing_enabled":true,"_links":{"self":[{"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/posts\/372027","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/users\/10320"}],"replies":[{"embeddable":true,"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/comments?post=372027"}],"version-history":[{"count":0,"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/posts\/372027\/revisions"}],"wp:attachment":[{"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/media?parent=372027"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/categories?post=372027"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/tags?post=372027"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}