Why is BRICS exploring cross-border payments? |Explained
BRICS nations are exploring new mechanisms for cross-border payments to reduce transaction costs, speed up settlements, and lessen dependence on dominant currencies like the US dollar and existing systems like SWIFT. Discussions include linking national digital payment systems (like India's UPI and Singapore's PayNow), utilizing central bank digital currencies (CBDCs) for interbank settlements on common platforms (such as mBridge), and exploring shared hubs like Project Nexus. While some members push for de-dollarization, India's official stance emphasizes reducing transaction costs and improving efficiency.
BRICS nations are exploring new mechanisms for cross-border payments to reduce transaction costs, speed up settlements, and lessen dependence on dominant currencies like the US dollar and existing systems like SWIFT. Discussions include linking national digital payment systems (like India's UPI and Singapore's PayNow), utilizing central bank digital currencies (CBDCs) for interbank settlements on common platforms (such as mBridge), and exploring shared hubs like Project Nexus. While some members push for de-dollarization, India's official stance emphasizes reducing transaction costs and improving efficiency.
Exam linkage
GS Paper 2 (International Relations - BRICS, international groupings) and GS Paper 3 (Indian Economy - Digital financial infrastructure, external sector, monetary policy implications).
Syllabus mapping
This topic appears in Mains
Questions on Indian Economy come up regularly in GS papers. Practice writing an answer — and see exactly what earns marks.
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