Published On 6/5/2026
The BRICS group is approaching a step that may represent one of its most ambitious financial initiatives since its expansion to 11 countries, after preparing a draft framework for a digital settlement code based on blockchain technology and intended for cross-border payments between central banks and financial institutions in member countries, according to a report published by “The Banker” magazine.
According to the report, the project aims to establish a joint settlement mechanism for trade and investment among the countries of the group without the need to adopt a unified currency, in a compromise that came after years of controversy regarding the difficulty of establishing a monetary union between economies that differ greatly in their monetary policies, exchange rate systems, and economic priorities.
The report quoted officials involved in the discussions that the project has passed the stage of preliminary studies and limited experiments, and that the draft regulatory framework has become almost complete in preparation for moving to the next stage of implementation.
One of the officials participating in the discussions said, “A pilot phase has already been completed, and a draft of the regulatory framework has been prepared in preparation for the next phase of implementation.”
Gold makes up 40% of the token’s value
According to the structure being considered, the proposed settlement token will be backed by 40% gold, while the remaining 60% is tied equally to a basket of currencies of the main countries in the group, ensuring diversification of the value of the new instrument and limiting the dominance of any single country over the system.
The report confirms that the project differs radically from previous proposals related to launching a unified BRICS currency, as its role will be limited to settling commercial transactions and foreign exchange transfers between participating institutions, while member states retain full sovereignty over their monetary policies and local currencies.
BRICS currently includes 11 countries, including China, Russia, India, Brazil and South Africa, in addition to new members such as Iran, the UAE and Indonesia.
According to data from the Brazilian presidency of the group, the BRICS countries represent about 39% of the global gross domestic product calculated on the basis of purchasing power parity, and 24% of global trade, and nearly half of the world’s population lives in them.
The group’s countries also produce about 43.6% of global oil and 36% of natural gas, giving them increasing weight in energy markets and international trade.
An alternative to the dollar path
The Banker report explains that the new settlement token may act as an intermediary asset between national banking systems.
For example, an Indian bank paying for imports from Brazil could convert the rupee into the BRICS settlement token, then transfer the token to a Brazilian financial institution that would then convert it to Brazilian reals for the exporter.
This mechanism would reduce the need to use the US dollar as an intermediary currency in international commercial payments, and would also reduce the need for any party to retain large amounts of the other party’s currency.
The project’s supporters believe that the new system may contribute to reducing the costs of cross-border transfers, speeding up financial settlement processes, and reducing dependence on traditional correspondent banking networks that dominate a large part of international trade.
The discussions also indicate that the project may help address imbalances that have emerged in bilateral settlement systems in local currencies, including the accumulation of large balances of some currencies in countries witnessing rapid growth in their intra-regional trade, as happened in some transactions between India and Russia.
Common digital platform
The basic idea of the project is to create a shared digital ledger based on blockchain technology, allowing participating financial institutions to complete settlements directly through a unified digital infrastructure instead of relying exclusively on traditional settlement networks.
According to informed sources who spoke to The Banker, the participating central banks are considering creating a regulatory sandbox and technology sandbox to test the system before launching it on a larger scale.
Another official involved in the discussions said that the current focus is on operational aspects, testing mechanisms and technical arrangements needed for implementation, adding that the discussions are likely to gain greater momentum during India’s presidency of the BRICS in 2026.
Political and technical challenges
Despite the progress achieved by the project, its implementation still faces a set of challenges related to regulatory coordination among member states, technical readiness, and the ability of different financial systems to operate in a compatible manner.
Officials involved in the discussions also acknowledged that geopolitical considerations may pose an additional obstacle to implementation, with some powers benefiting from the current global financial architecture likely to oppose any attempts to create alternative settlement mechanisms.
No final official decision has been issued yet regarding the project’s approval, and the Reserve Bank of India has not commented on reports regarding its role in the discussions.
However, the preparation of an advanced detailed draft of the initiative reflects, according to the “The Banker” report, a growing trend within BRICS towards building new financial instruments capable of supporting trade and investment among member states, while preserving the independence of national monetary policies and reducing dependence on traditional dollar-based settlement systems.
