As the BRICS bloc turns to alternative payment systems to ditch the US dollar, India is considering using cryptocurrency for trade. The country already completed its first crude oil transaction with the UAE using local currencies. The transaction was integrated within the XRP Ledger System CryptoTradingFund (CTF): a big step for India towards further crypto integration.
Ever since Russia legalized crypto payments, all eyes were on how that would integrate into its prominent economic alliance. With the bloc’s payment system on the way, digital assets could play a huge role. BRICS crypto payments could be key in overtaking the US dollar, and India could be one of the first to turn to crypto entirely in trade.
The Reserve Bank of India’s Governor Shaktikanta Das is advocating for a plug-and-play system to enhance cross-border payment efficiency and CBDC interoperability. At a recent conference, RBI Governor Shaktikanta Das said that maximum efficiency gains in such initiatives would come from ensuring interoperability as a key design element. “We can overcome this challenge by developing a plug-and-play system that allows replicability while also maintaining the sovereignty of respective countries.”
While the legacy payment systems should be able to connect to each other, and so should the CBDC systems, Das pointed out that one country’s legacy system should also be interoperable with another country’s CBDC. Thus, India and China connecting their digital currencies could be a major step for BRICS towards full use of the CBDCs.
The BRICS bloc has previously discussed cryptocurrency and CBDCs playing a part in trade within the group. China is currently developing a CBDC system that could work alongside the BRICS de-dollarization initiative. Furthermore, the incoming BRICS payment system could also introduce blockchain technology infrastructure. In turn, that could facilitate even greater crypto adoption amid alliance trading.