Brazil is proposing a blockchain payment system for BRICS to reduce reliance on the US dollar for cross-border transactions. This system aims to enhance transaction efficiency and lower costs. The initiative arises amidst rising interest rates and economic sanctions impacting member nations. Brazil hopes to present this plan as a cooperative project, while the BRICS bloc is expanding with several new partner nations.
Brazil is in the process of proposing a blockchain-based payment system specifically for the BRICS economic bloc, which comprises Brazil, Russia, India, China, and South Africa. This initiative aims to diminish dependence on the US dollar in internal cross-border transactions, a conversation that has gained traction since 2024. Notably, Brazil has recently assumed the BRICS Presidency as of January 1 and will host the annual summit in Rio de Janeiro in early July, where blockchain payments will be a discussed topic.
If enacted, the proposed system would offer a secure, transparent, and enduring financial infrastructure for BRICS members. The payment mechanism could potentially accelerate transaction processing times significantly while lowering costs. However, it remains uncertain if the BRICS will opt to create a new cryptocurrency for this system or rely on existing stablecoins and central bank digital currencies (CBDCs).
The origin of this initiative traces back to proposals made by Russia, which aimed to limit the use of the US dollar for internal settlements. Factors such as increasing US interest rates and economic sanctions against both Russia and China have fueled this interest. An advisor to President Putin articulated that the proposed system could mitigate US-influenced financial practices and simplify transactions between BRICS member nations.
Recent comments from former US President Donald Trump indicate a critical stance towards the BRICS group’s efforts to diminish the US dollar’s influence. He stated that he would impose a 100 percent increase in tariffs against BRICS nations. Despite this, Brazil is reportedly seeking to present its blockchain payment platform in a manner that promotes cross-border cooperation without provoking the US.
The BRICS group continues to expand, having added Belarus, Bolivia, Kazakhstan, Cuba, Malaysia, Thailand, Uganda, Uzbekistan, and Nigeria as partner nations on January 1. An additional thirty countries have expressed interest in joining the bloc, indicating its growing influence in the global economic landscape.
In summary, Brazil’s proposal for a blockchain payment system within the BRICS bloc represents a strategic move to reduce reliance on the US dollar for cross-border transactions. This system aims to enhance transaction efficiency and lower costs among member countries. While the exact nature of the payment mechanism remains undecided, the initiative reflects a broader desire among BRICS nations to streamline financial interactions and assert greater economic autonomy amidst geopolitical tensions.
Original Source: www.gadgets360.com
