India and Russia have begun working on a digital currency settlement mechanism for bilateral trade as their central banks examine how state-issued currencies could be used for cross-border payments.
Summary
- India and Russia are working on a mechanism that could use central bank digital currencies to settle bilateral trade payments.
- Sberbank CEO Herman Gref said the Bank of Russia and the Reserve Bank of India are working directly on the proposed digital currency system.
- Russia rolled out the digital ruble on Sept. 1, while India has been testing its e rupee since 2022 and examining cross border uses.
- The talks come as BRICS members discuss connecting national payment systems and using digital currencies for trade settlements.
- India and Russia recorded nearly $60 billion in bilateral trade in fiscal 2026 and are targeting $100 billion by the end of the decade.
Sberbank Chief Executive Officer Herman Gref said the Bank of Russia and the Reserve Bank of India are working on the mechanism, with Russia’s largest lender supporting the effort as the two countries look for new ways to settle their expanding trade.
“Now it’s only beginning, but we see huge opportunity for digital currency for all settlements between the countries,” Gref told reporters in New Delhi on Friday, where India is hosting the annual BRICS summit.
Gref said demand for digital currencies could grow as the technology becomes available for international settlements. Russia launched the national rollout of its digital ruble on Sept. 1, while India has been testing its own central bank digital currency since 2022.
“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,” Gref said.
The Reserve Bank of India had not commented on Gref’s remarks at the time of the report.
India and Russia explore digital currency trade payments
Talks between the two central banks follow several years of work on using CBDCs for international payments. The RBI has previously examined both bilateral and multilateral arrangements that could allow the digital rupee to settle transactions across borders.
In May 2025, crypto.news previously reported that the RBI was exploring cross-border CBDC pilots with international partners as part of the next phase of the digital rupee program.
India launched its wholesale digital rupee pilot in November 2022 and followed with a retail pilot the next month. The RBI said in its 2024-25 annual report that it planned to test more functions and cross-border applications after gaining experience from the domestic pilots.
The value of the digital rupee in circulation had climbed from 234.04 crore rupees in fiscal 2024 to 1,016.46 crore rupees in fiscal 2025, while the central bank continued looking at practical uses for the CBDC.
Russia has moved further into nationwide deployment. Its digital ruble entered a wider rollout on Sept. 1, requiring systemically important banks to provide digital ruble services and large merchants to begin supporting payments.
Major Russian telecom companies including MTS, Rostelecom and MegaFon prepared to accept the CBDC from the same date. Large retailers with annual revenue above 120 million rubles came under the first stage of mandatory acceptance, with requirements scheduled to extend to more banks and merchants in later phases.
The digital ruble operates alongside cash and existing non-cash rubles. Users can access digital ruble wallets through participating banking applications connected to the Bank of Russia’s platform.
BRICS members discuss linking CBDC payment systems
The India-Russia discussions sit within a separate BRICS effort to connect national payment systems for trade and other cross-border transactions.
The Kremlin said on Thursday that digital currency settlements would be discussed with BRICS members and partner countries during the New Delhi summit. India has backed work on CBDC-based settlement during its BRICS chairmanship this year.
Prime Minister Narendra Modi favors the use of central bank digital currencies for bilateral trade and cross-border payments between members, without presenting the plan as an attempt to challenge the U.S. dollar.
Earlier this year, the RBI proposed linking BRICS CBDCs to support direct settlements between participating countries. The proposal included currencies such as India’s e-rupee and other CBDCs developed by BRICS economies.
Such a network would require participating central banks to establish common technical standards and settlement rules. The RBI had considered bilateral foreign exchange swap arrangements as one possible method for dealing with trade imbalances between countries using their national digital currencies.
Discussions around a BRICS digital payment network predate India’s 2026 chairmanship. Russia had previously pushed for an independent BRICS payment system using blockchain and digital currencies, while officials have considered ways to connect the payment infrastructure of member countries.
The work gained more attention after major Russian banks lost access to the SWIFT financial messaging network following Russia’s invasion of Ukraine in 2022. Moscow has since pursued several alternative channels for international payments as Western sanctions restricted access to parts of the traditional financial system.
Digital ruble rollout gives Russia a working CBDC rail
Russia’s Sept. 1 rollout has given the country a live domestic CBDC system while discussions with India continue.
The digital ruble became available through 12 systemically important banks during the first stage of the rollout. The Bank of Russia plans to expand participation in phases, eventually requiring the rest of the banking sector and more merchants to support the CBDC.
The launch came on the same day Russia’s regulated crypto market framework took effect, creating separate rules for cryptocurrency trading, custody and international settlements.
Under the crypto framework, eligible digital assets can be used for regulated cross-border commercial transactions, while cryptocurrency payments for goods and services remain restricted inside Russia. Non-qualified retail investors can buy up to 300,000 rubles of eligible cryptocurrencies annually through each intermediary after passing a suitability test, while qualified investors face fewer purchase restrictions.
Bitcoin, Ether and USDT were among the assets proposed by the Bank of Russia for regulated trading.
The digital ruble remains separate from those privately issued or decentralized digital assets because it is a direct liability of Russia’s central bank.
Rupee accumulation is no longer a major trade problem, Gref says
Payment arrangements between India and Russia have received particular attention since bilateral trade rose sharply after 2022, driven largely by Indian purchases of Russian oil.
Russia accumulated billions of dollars worth of rupees through trade as Indian imports from the country outpaced exports in the opposite direction. Some of the money was held in vostro accounts maintained by foreign banks with Indian lenders for rupee-based trade settlement.
Gref said the accumulation was no longer a significant obstacle because Russian companies had found ways to use the funds.
“Now it’s not the problem in our trade and we try to increase the trade between the countries,” he said.
Some excess rupees have been invested in Indian federal government securities, according to Gref, although he did not provide a figure.
The RBI had introduced rules allowing accumulated rupee balances to be invested in Indian projects and securities or used to pay for future purchases of goods and services, giving Russian companies more options for deploying funds generated through bilateral trade.
India and Russia have ranked among each other’s five largest trading partners since India increased purchases of Russian oil following the invasion of Ukraine. Bilateral trade reached nearly $60 billion in India’s fiscal 2026, with Russian energy shipments accounting for much of India’s imports.
The two countries are targeting $100 billion in bilateral trade by the end of the decade, but the flow remains heavily weighted toward Russian exports.
Gref said the imbalance exceeds $50 billion and called for more Indian goods to reach the Russian market.
“We need to bring more Indian exports and more opportunities to the Russian market and this is our goal,” he said.
