India, Russia discuss CBDC payments as bilateral trade nears $60 billion
India and Russia are discussing a settlement mechanism that could use central bank digital currencies to pay for bilateral trade. It could cut friction in cross-border transfers, if the system actually works and the counterparties actually use it.
- Herman Gref says the Bank of Russia and the RBI are working on a CBDC settlement mechanism.
- Russia’s digital ruble has moved into wider rollout; India’s digital rupee is still in pilot and testing mode.
- The push sits inside BRICS talks about linking national payment systems.
- The upside is real, but so are the problems: sanctions, trade imbalances, technical integration, and adoption.
Sberbank CEO Herman Gref said in New Delhi on Friday that the Bank of Russia and the Reserve Bank of India are working “very precisely” on a digital currency settlement mechanism for bilateral trade.
“Now it’s only beginning, but we see huge opportunity for digital currency for all settlements between the countries, ”, Herman Gref
“The Russian central bank and the central bank of India are working on this very precisely and we have tried to support them because we need this kind of instrument, ”, Herman Gref
That is the key point. This is still a work in progress, not a done deal. Useful? Potentially. Guaranteed? Not even close. In crypto and payments, the gap between “we’re exploring it” and “businesses can actually rely on it” is where many big ideas go to die in a committee meeting.
A CBDC, or central bank digital currency, is digital money issued by a central bank. It is not Bitcoin, not a private stablecoin, and not a speculative token from some startup that discovered a white paper and a marketing budget. It is sovereign money in digital form, with the state still firmly holding the wheel.
For India and Russia, that matters because both countries have reasons to look for payment rails that are less dependent on traditional correspondent banking. That term just means banks using other banks’ networks to move money internationally. Fewer intermediaries can mean faster settlement, lower reconciliation errors, and fewer delays, in theory at least.
Russia has had strong incentives to find alternatives since sanctions and banking restrictions tightened after its 2022 invasion of Ukraine. India has taken a more cautious route, but it has been testing its own digital rupee since 2022 and has shown interest in using it beyond domestic pilots.
According to the material provided, India launched a wholesale digital rupee pilot in November 2022, followed by a retail pilot the next month. The Reserve Bank of India said in its 2024-25 annual report that it planned to test more functions and cross-border applications. The value of the digital rupee in circulation rose from 234.04 crore rupees in fiscal 2024 to 1, 016.46 crore rupees in fiscal 2025.
That is a notable increase, but it is not the same thing as mass adoption. Circulation figures tell you the project is growing. They do not tell you whether merchants, banks, and ordinary users are lining up to use it instead of established payment rails.
Russia’s digital ruble has also moved beyond the test-lab phase. The rollout that began on Sept. 1 required systemically important banks, the big lenders regulators treat as essential to the financial system, to offer digital ruble services. Large merchants were expected to begin supporting payments too.
Those merchants include major Russian telecom firms such as MTS, Rostelecom and MegaFon. Large retailers with annual revenue above 120 million rubles came under the first stage of mandatory acceptance.
That kind of mandate can speed up adoption. It can also create the usual government-tech problem: rollout is easy to announce, harder to make pleasant. A payment rail nobody wants to use is not a breakthrough. It is a compliance exercise with a nicer logo.
The trade backdrop explains why this is getting attention now. India and Russia recorded nearly $60 billion in bilateral trade in fiscal 2026, and the two countries are targeting $100 billion by the end of the decade. Gref said the trade imbalance exceeds $50 billion, which is no small bookkeeping headache when one side accumulates a large surplus in the other’s currency.
That imbalance is one of the biggest practical challenges in any bilateral settlement system. If trade is lopsided, somebody has to deal with the pile of currency or payment credits that builds up on one side. CBDCs do not magically erase that problem. They may change the rail, but they do not repeal arithmetic.
The political context matters too. The Kremlin said on Thursday that digital currency settlements would be discussed with BRICS members and partner countries during the summit. BRICS has become a natural venue for talk about alternative payment systems, local-currency settlement, and reduced reliance on dollar-linked infrastructure.
That does not automatically mean a grand anti-dollar revolution is around the corner. It does mean emerging-market governments are increasingly interested in payment systems they control more directly. For Russia, that interest is sharpened by sanctions pressure. For India, the incentive is more about efficiency, flexibility, and keeping options open.
Still, a cross-border CBDC rail is hard stuff. It has to handle interoperability, legal alignment, compliance rules, liquidity management, and settlement finality. In plain English, both sides need to agree on how money moves, when a payment is considered finished, who checks for illicit flows, and what happens when something breaks. That is not a light lift between two sovereign systems, especially when politics can turn hostile fast.
There is also an important distinction that gets blurred way too often: CBDCs are not cryptocurrencies. A digital rupee or digital ruble is central-bank money with central-bank controls. Bitcoin is decentralized money with no central issuer. Stablecoins sit somewhere in between, depending on how they are structured and backed. Mixing those categories together is sloppy and usually serves somebody’s sales pitch.
Russia’s broader crypto framework adds another layer. On the same day as the digital ruble rollout, a separate framework took effect that allows eligible digital assets to be used for regulated cross-border commercial transactions, while crypto payments for goods and services remain restricted inside Russia. Non-qualified retail investors can buy up to 300, 000 rubles annually through each intermediary after passing a suitability test. Bitcoin, Ether and USDT were among the assets proposed by the Bank of Russia for regulated trading.
That is not a libertarian crypto paradise. It is a controlled system with carefully defined lanes. The message from Moscow is pretty clear: digital assets are welcome when they help the state manage trade and markets, but not when they create an open-ended payment system the state cannot easily supervise.
India, by contrast, has been more measured. That caution makes sense. The country already has strong domestic payment rails, so a CBDC has to prove it can do something useful that existing systems do not. Cross-border settlement may be one of the few use cases that could justify the effort, especially if it reduces friction in selected trade flows.
But the hype should stay on a short leash. A central bank discussing a pilot is not the same as a live, production-grade settlement network. A rise in circulation does not prove genuine usage. And a BRICS discussion does not mean every member state is about to sign up for the same technical standard and political risk.
There is a real upside here if the plumbing holds together: faster settlement, fewer intermediaries, less dependence on traditional banking channels, and possibly a cleaner path for trade between countries that want more control over their own rails. There is also a very real downside: clunky implementation, patchwork adoption, compliance headaches, and a system that looks stronger in policy decks than in day-to-day commerce.
That is the reality with state digital money. The pitch is usually elegant. The implementation is where the bodies are buried.
Key questions and takeaways
-
What are India and Russia discussing?
They are exploring a settlement mechanism that would use CBDCs, the digital rupee and digital ruble, to settle bilateral trade more directly. -
Why does this matter?
In theory, it could reduce reliance on correspondent banking, speed up settlement, and make trade easier to manage between the two countries. -
Is this the same as using Bitcoin?
No. CBDCs are issued and controlled by central banks. Bitcoin is decentralized and not state-issued, so it works on completely different principles. -
Are India and Russia ready to launch this now?
No. The available information points to ongoing work, pilots, and planning rather than a fully deployed cross-border system. -
What is the biggest obstacle?
The hardest parts are interoperability, legal alignment, compliance, liquidity management, and whether businesses actually want to use the rail. -
Can this bypass sanctions?
Not automatically. A CBDC-based system may reduce dependence on some traditional channels, but it does not erase sanctions risk or political constraints. -
Why would India bother if its domestic payments already work well?
Cross-border settlement is a different problem from domestic payments. A CBDC could be useful if it makes trade settlement cleaner or less dependent on foreign banking infrastructure.
The big picture is simple enough: India and Russia are trying to see whether state-issued digital money can make trade settlement less clunky and less dependent on older banking rails. That is a serious effort, not just press-release theater. But serious efforts still fail when the tech, the rules, and the politics refuse to line up.
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