Should BRICS members adopt a wholesale digital payment system?

This article examines proposals to establish a BRICS central bank digital currency (CBDC) aimed at facilitating trade flows among the members, as part of their broader discussions around reforming the international monetary and financial system. It sets these proposals within the context of global CBDC efforts, South-South convergence processes, and the challenges the BRICS have faced in navigating global geo-political tensions, while aligning national CBDC efforts with groupwide initiatives. We focus on a Brazilian proposal to establish a unified BRICS cross-border payment system, seen as a first step towards a full-fledged BRICS CBDC. Our main finding is that, while this cross-border digital currency can be useful for smoothing payments and reducing the trade deficits of the smaller BRICS members, it does little to redress their asymmetric position vis-à-vis the larger country, China. The implication is that sustainable convergence among the grouping through the adoption of a unified cross-border currency would require a higher level of monetary and policy coordination than that set out in the Brazilian proposal.