Digital currencies enter Russia-India trade talks at BRICS

Digital currencies moved into Russia-India trade talks after Sberbank’s chief said both central banks are developing a settlement mechanism.

Herman Gref, chief executive of Sberbank, told reporters in New Delhi on Friday that the Bank of Russia and the Reserve Bank of India are working on a way to use central bank digital currencies in bilateral commerce. India is hosting the annual BRICS summit, giving the proposal a political stage beyond the two countries.

Gref framed the work as early-stage but commercially useful for settlement between the countries. The Reserve Bank of India did not immediately respond after his comments, leaving the current design, timeline and technical standards unconfirmed by the Indian regulator.

Gref points to CBDC rails

The mechanism under discussion would use state-issued digital money rather than private crypto tokens. That distinction matters: central bank digital currencies, or CBDCs, are liabilities of monetary authorities and are designed to preserve official control over payment rails.

Russia introduced the digital ruble on September 1 through systemically important banks, including state-controlled Sberbank. India began testing its own digital currency in 2022 and has since used it in some government programs, according to the details provided around Gref’s remarks.

Sberbank has a direct interest in the project because it sits at the intersection of Russian banking, corporate settlement and the country’s effort to keep cross-border payment channels functioning. Gref said the Russian and Indian central banks are handling the work closely, while Sberbank is trying to support the effort because companies need such an instrument.

BRICS payments draw scrutiny

The Kremlin said on Thursday that Russia planned to discuss digital currencies for trade settlement with BRICS members and partner countries at the New Delhi summit. India has also backed CBDC use for cross-border payments, while avoiding a public framing that presents the idea as a direct challenge to the dollar.

The payment question has become more practical since 2022, when several large Russian banks lost access to the SWIFT messaging network after Russia’s invasion of Ukraine. BRICS members have since explored ways to connect national payment systems, though such links require legal, technical and liquidity arrangements before they can process trade at scale.

For India, the calculus is different from Russia’s. New Delhi has an interest in cheaper settlement routes with trading partners, but it also has to protect monetary-policy control, sanctions exposure and the credibility of its own payment infrastructure.

Rupee balances lose urgency

One pressure point has been the buildup of rupees in vostro accounts, which foreign banks hold with Indian lenders to settle trade in the Indian currency. Gref said that issue is no longer a major obstacle because Russian companies had found ways to use those rupee balances.

That claim is important but remains sourced to Gref. Without confirmation from Indian authorities or company-level disclosures, the scale of the remaining balances and the channels used to deploy them cannot be independently sized from the available information.

If the two central banks agree on interoperable CBDC settlement, Russian exporters could gain a narrower route for rupee-ruble payments, while Sberbank could strengthen its role as a gateway bank for bilateral trade. For the wider financial sector, the effect would depend on whether other BRICS banks can connect to the same standards rather than rely on bespoke links.

If technical or compliance hurdles slow the project, the near-term macro effect is likely to remain limited to payment infrastructure rather than trade volumes. In that case, Sberbank would still have to work through existing correspondent and local-currency channels, and the industry would treat CBDCs as a pilot tool rather than a replacement for established settlement networks.

The main open questions are whether India and Russia can agree on settlement finality, convertibility and compliance checks across two sovereign digital-currency systems. Those details will determine whether the proposal becomes a usable trade rail or remains another BRICS payment initiative with more political visibility than transaction volume.