Why is it in the news?
→ RBI recommended placing a proposal to link BRICS CBDCs on agenda of 2026 BRICS summit (host: India).
→ Proposal builds on 2025 BRICS Rio declaration on payment interoperability.
Category
Economy
Important Points
- CBDC is a digital form of fiat currency issued and backed by the central bank; legal tender.
- Centralised, stable, and direct claim on central bank, unlike cryptocurrencies.
- Uses cryptography, encryption and digital signatures; privacy via zero-knowledge proofs.
- Retail CBDC for public; wholesale CBDC for interbank settlements.
- Bahamas launched Sand Dollar in 2020; Nigeria launched eNaira in 2020.
- Over 90% central banks exploring CBDCs; ~60% running pilots.
- BRICS pilots: Brazil (Drex), Russia (Digital Ruble), India (e-Rupee – 7 million retail users), China (e-CNY); South Africa in research stage.
- Digital currency types: cryptocurrencies, virtual currencies, CBDCs.
- Objective: modernise payments amid rise of private digital currencies and declining cash.