R. Suryamurthy
BRICS has never suffered from a shortage of ambition. Its communiqués have imagined a more representative world order, a stronger voice for emerging economies, alternative financial institutions, greater use of local currencies and, increasingly, payment systems capable of reducing dependence on the infrastructure that has underpinned the dollar-centric global financial system for decades.
What it has lacked, more often than not, is the machinery to convert political aspiration into economic reality. That is the uncomfortable context in which India’s proposal to explore interoperability among central bank digital currencies should be discussed at the New Delhi summit. The idea is attractive. It promises faster cross-border settlements, greater flexibility in local-currency trade and additional channels through which businesses can move money across borders. Yet the proposal will become just another entry in BRICS’ expanding catalogue of unrealised ambitions if leaders leave New Delhi with lofty language but without an implementation strategy.
The summit, therefore, confronts a choice that goes well beyond digital currencies.
Will BRICS continue to confuse announcing an objective with achieving it, or is it finally prepared to do the slow, politically difficult work that institution-building demands?
The distinction is crucial because a cross-border payment network cannot be created by political declaration. Leaders may endorse interoperability, but interoperability does not emerge because eleven governments agree that it would be useful. It requires common—or at least compatible—rules governing settlement, liquidity, data, cybersecurity, financial crime, consumer protection and the allocation of losses when something goes wrong.
These are not technical details to be resolved later. They are the project. The danger is that BRICS will approach the CBDC proposal with the same summit-driven logic that has weakened many multilateral initiatives: first announce the destination, then create committees to discuss the road, and finally discover that the countries involved disagree on who will build it, who will pay for it and which rules will govern it. That formula produces impressive declarations. It does not produce functioning institutions.
A BRICS digital payment initiative must begin with a recognition that the technology is, in many respects, the easiest part. Connecting digital systems is a challenge, certainly, but one that engineers can solve. The much harder task is persuading sovereign states to accept common operating principles when those principles touch some of the most sensitive areas of national power.
Money is one such area. Data is another. National security is a third. Once a payment crosses a border, a deceptively simple transaction raises a chain of questions. Which regulator has jurisdiction? Where is the transaction data stored? Who can access it? How long can it be retained? Which country’s anti-money laundering rules apply? Who is responsible if the payment is fraudulent? Who absorbs the loss if a currency moves sharply before settlement?
There is no digital shortcut around these questions. Indeed, the more sophisticated the technology becomes, the more complicated the governance can become. That is particularly true for central bank digital currencies. Unlike an ordinary cross-border payment application, a CBDC represents sovereign money in digital form. Connecting CBDCs therefore involves not merely linking payment platforms but potentially connecting systems that sit close to the core of national monetary and financial sovereignty. BRICS must not underestimate what that means.
The grouping contains countries with vastly different financial systems and regulatory structures. Some currencies are more convertible than others. Financial markets differ sharply in depth and liquidity. Data protection regimes are not uniform. Capital controls vary. The willingness to permit foreign entities access to sensitive financial information varies even more.
Yet BRICS frequently speaks about financial integration as though these differences were obstacles that technology will eventually overcome. They will not. The central problem is political compatibility, not digital compatibility. This is where New Delhi should impose discipline on the discussion.
Rather than attempting to design a BRICS-wide payment network, the grouping should first identify where such connectivity is commercially viable. Not every country needs to be connected to every other country on the first day. Not every currency requires the same settlement arrangement. And not every bilateral relationship possesses the political confidence necessary for deep financial integration.
The logical approach is to build from the edges inward. Start with bilateral corridors where trade volumes are substantial and both governments have a clear commercial incentive to reduce transaction costs. Develop local-currency settlement arrangements. Establish the liquidity mechanisms necessary to support them. Test the regulatory architecture. Identify operational failures. Correct them.
Only after such arrangements demonstrate that they work should BRICS attempt to expand them. This may appear less ambitious than announcing a single bloc-wide digital payment system. It is also far more likely to succeed.
The obsession with grand architecture has repeatedly distracted BRICS from the more useful task of building practical economic connections. There is a tendency to treat scale as evidence of success. The larger the initiative, the more it appears to challenge the existing international order.
But financial infrastructure does not become credible because it is described as historic. It becomes credible because people use it. Businesses will not settle trade through a BRICS payment mechanism because governments have declared it strategically important. They will use it if it is cheaper, faster, reliable, legally secure and capable of providing sufficient liquidity.
Commercial utility—not geopolitical symbolism—will determine whether the system survives. This is also why the debate must be separated from the exaggerated rhetoric surrounding de-dollarisation.
BRICS does not need to overthrow the dollar to justify developing alternative payment channels. That objective is both unnecessarily dramatic and economically misleading. The dollar’s international role is sustained by an ecosystem far larger than cross-border messaging or payment technology.
A digital connection between national currencies will not suddenly create deep financial markets. It will not make every BRICS currency freely convertible. Nor will it provide the reserve assets, liquidity and institutional confidence that have made the dollar central to international commerce.
But that does not mean the exercise is pointless. On the contrary, there is a compelling argument for diversification. The international financial system should not depend excessively on a single channel, a single infrastructure or a single settlement mechanism. Creating additional options can improve resilience. Local-currency settlement can make economic sense where trade relationships are sufficiently deep. Bilateral payment links can reduce costs and delays.
The mistake would be to market these practical objectives as a currency revolution. BRICS should stop trying to sound transformative and concentrate on becoming functional. That would represent a far more meaningful achievement.
The New Delhi summit should therefore avoid the familiar temptation to announce an expansive vision whose implementation is postponed into an undefined future. Instead, it should produce a time-bound programme. Not a statement of intent. A programme.
The first stage should establish which countries are ready for pilot projects and which trade corridors offer sufficient economic justification. The second should address regulatory compatibility, data governance and cybersecurity. The third should create the liquidity and currency-swap arrangements necessary to prevent settlement systems from being undermined by persistent trade imbalances.
Only then should the grouping consider wider multilateral integration. The roadmap must also assign responsibility. Someone must be accountable for moving the project forward between summits. Central banks, finance ministries and payment regulators need clearly defined roles. Technical working groups require deadlines rather than open-ended mandates.
And progress must be measurable. How many bilateral links have been established? What volume of trade is actually being settled? How much has transaction time been reduced? What regulatory barriers remain? Without such benchmarks, BRICS will have no way of distinguishing progress from diplomatic activity.
That distinction matters because multilateral organisations are remarkably capable of creating the appearance of movement. Meetings are held. Working groups are established. Joint statements are issued. New phrases enter the diplomatic vocabulary. Years pass. Very little changes.
BRICS cannot afford that pattern if it wants to be taken seriously as an economic force rather than merely a geopolitical forum. The grouping has grown larger and more influential, but expansion brings its own complications. More members mean greater global representation, but they also mean more currencies, more regulatory systems and more national interests.
In other words, BRICS is becoming more important at precisely the moment it is becoming more difficult to coordinate. That is why institutional realism must replace rhetorical excess.
The CBDC proposal could become a test case. If BRICS cannot develop a gradual, practical mechanism for connecting even selected payment systems, the broader claims about constructing an alternative financial architecture will sound increasingly hollow.
If, however, it succeeds in building a few reliable links and expands them over time, it could demonstrate something far more valuable than another political declaration: that cooperation among highly diverse economies can produce institutions capable of functioning outside the summit room.
New Delhi should insist on that standard. The summit does not need to promise a new international monetary order. It does not need another dramatic statement about a digital future. And it should resist the temptation to turn an experimental payment proposal into a geopolitical spectacle.
What BRICS needs is something less glamorous and infinitely more difficult. A sequence. A timetable. Pilot projects. Rules. Institutions. Accountability. Because the fundamental weakness of BRICS has never been a lack of ideas. It has been the distance between the ideas it announces and the institutions it creates.
The CBDC proposal offers an opportunity to narrow that distance. But only if New Delhi refuses to let another ambitious concept disappear into the comfortable obscurity of a summit declaration. BRICS has produced enough promises. The test now is whether it can produce a system that works. A manifesto can be written in a weekend. A financial architecture cannot.