Discuss the rationale behind BRICS' push for alternative cross-border payment mechanisms. How does India's UPI model inform this initiative?

Cross-border payments today travel through correspondent banking chains — intermediary banks that add cost, delay and opacity. Under India's BRICS Chairship 2026 [1], the grouping is exploring linked instant-payment systems and CBDC interoperability, making the rationale and India's template central questions.

Rationale for the BRICS push

• Cost and speed: the World Bank's Remittance Prices Worldwide records a global average sending cost of about 6.4%, with banks the costliest channel at nearly 15%, against the SDG target of under 3% [3]. Multi-hop routing is the structural culprit.
• Trade settlement: rising intra-BRICS trade in local currencies avoids double conversion into a vehicle currency, conserving foreign exchange.
• Strategic autonomy: dependence on a single set of Western-controlled rails exposes members to sanctions and payment disruption, driving the de-dollarisation debate.
• Institutional momentum: the BRICS Payment Task Force was mandated to identify pathways for greater interoperability, endorsed by the 2025 Rio de Janeiro Declaration [2]; the Third CGETI meeting and the 16th Trade Ministers' Meeting (Jaipur, August 2026) carried this into India's Chairship agenda [1].

How India's UPI model informs it

• UPI demonstrates that a public digital payments utility can deliver real-time, near-zero-cost settlement at population scale — a template rather than a product.
• Its interoperable, standards-based architecture allows any bank or app to plug in, which is precisely what linking heterogeneous national systems requires.
• The UPI–PayNow linkage with Singapore is a working proof of concept for connecting two fast payment systems bilaterally [4].
• RBI's Utkarsh 2029 strategy explicitly pursues internationalisation of the rupee and UPI, and extension of CBDC to cross-border payments [5], giving India credibility in shaping norms.

Yet interoperability is not automatic: divergent regulatory maturity, monetary-sovereignty concerns and legitimate anti-money-laundering safeguards need reconciliation, and no common BRICS currency exists. The realistic path is incremental — bilateral linkages first, common technical standards next. Anchored in India's proven digital public infrastructure, such a system can advance the shared goal of cheaper, faster and more inclusive payments.