BRICS Payments System Gains Momentum with Digital Currency Links and Gold-Backed Token

The BRICS dollar alternative is gaining momentum as members connect digital currencies, link payment networks, and draft a gold-backed settlement token to reduce reliance on the US dollar.

Interconnected central bank digital currencies (CBDCs) are being lined up for interconnection, with UnionPay plugged into Brazil's Pix network. Argentina has extended its currency swap with China by five years, covering 130 billion yuan ($19.1 billion), while a new settlement token is on the desks of central bankers across the bloc.

The Reserve Bank of India proposed linking BRICS digital currencies at the recent summit, which it chairs. The goal is to connect existing CBDCs, such as India's e-rupee and Brazil's Drex, rather than introducing a common currency.

Momentum has also built through mBridge, a cross-border payment system run by central banks in China, Hong Kong, Thailand, and the UAE with the BIS Innovation Hub. It now settles CBDC payments in seconds instead of days.