Brics nations are assessing whether a digital payments framework linking their currencies could lessen the impact of Western sanctions, tariffs and US dollar volatility without destabilising the Washington-led global financial system.

Under the plan proposed by India’s central bank, Brics is looking to allow cross-border transactions to be settled in local currencies. Its feasibility depends on how far the bloc’s members can lessen their reliance on Western-controlled payment channels without alarming the US, according to analysts.

Brics foreign ministers are scheduled to meet in New Delhi from May 14-15 ahead of the bloc’s summit on September 10-11, when payment connectivity and trade settlements are expected to be among the issues on the agenda.

After the formation of Brics by founders Brazil, Russia, India and China in 2009, the bloc has welcomed South Africa, Egypt, Ethiopia, Indonesia, Iran and the United Arab Emirates as members in subsequent years.

Geeta Kochhar, senior assistant professor at the Centre for Chinese Studies at Jawaharlal Nehru University in New Delhi, said a decentralised financial payments system within Brics could make it more resilient against external developments.

“It is like a strategic tool to provide immunity against Western economic leverage. Even if there is dollar volatility, it will not impact payments as it will be near real-time payments,” she said.