Interoperability of Instant Payment Systems and CBDCs within BRICS

On August 11, 2026, RBI Governor Sanjay Malhotra confirmed that BRICS members are actively exploring links between their instant payment systems (FPS) and Central Bank Digital Currencies (CBDC). The goal is to cut costs and settlement times for cross-border retail and trade payments. Discussions remain exploratory; India, as 2026 chair, hosted the summit and pushed for CBDC interoperability on the agenda. This builds on mBridge (a multi-CBDC wholesale platform involving China, Hong Kong, Thailand, UAE, and Saudi Arabia, with growing volumes, mostly in e-CNY), BRICS Pay concepts, and Project Dunbar. It represents an attempt to construct alternative settlement infrastructure to correspondent banking/SWIFT, carrying geopolitical (gradual de-dollarization), microstructural, and financial stability implications.

State of the Art and Mapping M. Theory 4.2

The M. Theory 4.2 cross-references multiple data sources (RBI, BIS mBridge, OSINT, DLT proxies, and behavioral sentiment analysis) to analyze the 2026 national CBDC and instant payment landscape. India (UPI, Digital Rupee), China (e-CNY, CIPS, mBridge dominance), Brazil (Pix), Russia (Digital Ruble rollout), and South Africa (wholesale caution) are highlighted. Current cross-border costs average 6-7% (retail, T+1 to T+5 delays), with a theoretical goal of 50-80% reduction through FPS-CBDC interoperability.

Technical Architecture and Interoperability Models

We present here the technical architecture and interoperability models for cross-border payments, presenting three classical BIS models: compatible systems with common standards, interlinked systems using bilateral or multilateral gateways, and a single shared platform like mBridge. It introduces a simplified cross-border friction cost formula: C_cross = c_corr + c_FX + c_compliance + c_time × r_opportunity, where CBDC and FPS interoperability aims to minimize c_corr (correspondent costs) and c_time (time costs). Applying game theory, it describes a non-cooperative infrastructure game among BRICS nations, with asymmetric payoffs: China as a technological leader via mBridge and India as a retail leader via UPI. The potential Nash equilibrium is a hybrid FPS-CBDC platform with multiparty governance, constrained by sanctions and monetary sovereignty concerns.

Quantitative Modeling with Markov-Switching regimes

Regime 1 (Status Quo SWIFT): high friction. Regime 2 (Gradual Interoperability): lower settlement spreads. Regime 3 (Geopolitical Fragmentation): dual rail systems. Monte Carlo 100,000 trajectories (2027-2030 horizon) calibrated on current mBridge volumes (~$70B cumulative, growing) and cost-volume elasticity. Central scenario: 15-25% adoption of intra-BRICS flows by 2030 yields annual savings of $8-15B (extrapolated from BRICS+ Analytics studies). Adverse scenario: adoption <5% due to regulatory hurdles, lack of local FX liquidity, and sanctions. Quantum-Classical Hybrid Optimization 1.0: portfolio of corridors (INR-CNY, BRL-RUB, etc.) under liquidity, FX risk, and concentration constraints.

Systemic risks

Lack of local currency market depth leads to amplified volatility. Partial circumvention of SWIFT fragments global liquidity. mBridge perceived as a circumvention tool (BIS withdrawn). Multi-jurisdiction interoperability increases cyber risks. Structural pressure on the US dollar (correlation DXY/BRICS Pay volumes). Monitoring via Steelldy: mBridge volumes, FPS-CBDC spreads, COT on BRICS currencies, NLP sentiment, DP flows (commodities, EM FX).