Brazil is proposing a blockchain-based payment system for BRICS to improve cross-border transactions and reduce costs. This initiative will be discussed at the upcoming BRICS summit in July. The plan does not involve a common BRICS currency, and Brazil aims to minimize potential U.S. backlash while the nation sees growth in cryptocurrency adoption.
Brazil is advancing a proposal to implement a blockchain-based payment system within the BRICS economic bloc, aimed at facilitating cross-border transactions while reducing costs. As Brazil takes the presidency within BRICS, officials have insisted that this initiative is not meant to counter the dominance of the U.S. dollar.
During the upcoming BRICS summit scheduled for July in Rio de Janeiro, Brazilian delegates will present the proposal. This system is designed to improve trade efficiency among member nations such as China, Russia, India, and South Africa by simplifying the import-export process and decreasing transaction fees. However, the specific applications of blockchain technology within this system are yet to be detailed.
Notably, the proposal does not involve the creation of a common BRICS currency, a notion previously championed by Dilma Rousseff, the head of the BRICS New Development Bank. Brazilian President Luiz Inácio Lula da Silva has also distanced his administration from earlier discussions that suggested an alternative to the U.S. dollar for international trade.
Despite these clarifications, concerns regarding potential reactions from the United States persist. A former U.S. president, who is currently campaigning for re-election, has indicated the possibility of enacting 100% tariffs on nations endorsing alternatives to the dollar. To avoid economic retaliation from Washington, Brazil plans to present the blockchain initiative in a strategically cautious manner.
As BRICS expands to include nations such as Saudi Arabia, Egypt, the UAE, Ethiopia, Iran, and Indonesia, the demand for an efficient cross-border payment solution has become increasingly critical. It remains to be seen how Brazil will navigate the intricate economic and geopolitical landscape surrounding this initiative. Concurrently, Brazil has been strengthening its position in the global cryptocurrency market, with approximately 26 million citizens, or 12% of the population, owning digital assets. This growth solidifies Brazil’s status as a leading nation in cryptocurrency adoption.
In conclusion, Brazil’s proposal for a blockchain-based payment system within BRICS aims to enhance cross-border transactions while avoiding challenges to the U.S. dollar. While the plan excludes a common BRICS currency, Brazil seeks to mitigate potential U.S. economic retaliation as its influence in the cryptocurrency sector continues to grow. The upcoming BRICS summit will be a crucial forum for this initiative.
Original Source: www.cointrust.com
