Brazil proposes a blockchain-based payment system for BRICS to streamline transactions and reduce costs, aiming to enhance trade among member countries while clarifying it does not seek to replace the U.S. dollar. The initiative will be discussed at the BRICS summit in July. Brazil also leads in cryptocurrency adoption with a significant portion of its population owning digital currencies.
Brazil is advancing its proposal for a blockchain-based payment system within the BRICS economic bloc, intended to enhance cross-border transactions and lower costs while maintaining financial efficiency. As Brazil assumes the presidency of BRICS, officials have made it clear that this initiative is not aimed at undermining the U.S. dollar’s dominance.
Brazilian representatives plan to present this proposal during the upcoming BRICS summit in July in Rio de Janeiro. The proposed system is designed to facilitate trade among member nations, including China, Russia, India, and South Africa. It seeks to simplify import-export processes and minimize transaction fees; however, specific details on the application of blockchain technology remain undisclosed.
Importantly, the initiative does not propose a common BRICS currency, which had been previously endorsed by Dilma Rousseff, the president of the BRICS New Development Bank. Furthermore, Brazilian President Luiz Inácio Lula da Silva has distanced himself from suggestions of a dollar alternative in international trade, clarifying Brazil’s position on currency matters.
Concerns persist regarding potential U.S. reactions, particularly from a former U.S. president advocating punitive tariffs against nations leveraging alternatives to the dollar. To address these concerns, Brazil aims to introduce the blockchain payment system in a manner that mitigates possible economic backlash from the United States.
As BRICS grows, now including Saudi Arabia, Egypt, the UAE, Ethiopia, Iran, and Indonesia, the need for a more efficient cross-border payment solution is clear. Nevertheless, Brazil faces challenges in navigating the complexities related to the economic and geopolitical landscape.
In addition, Brazil is enhancing its profile in the global cryptocurrency sector, with approximately 26 million citizens—12% of the population—owning cryptocurrencies. This statistic underscores Brazil’s position as a leader in digital asset adoption, reflecting its increasing influence in the cryptocurrency market.
In summary, Brazil’s proposed blockchain-based payment system for BRICS aims to facilitate international trade while reducing transaction fees, without challenging the U.S. dollar’s position. The absence of a common BRICS currency has been clarified by Brazilian officials. With rising demand for efficient payment solutions amidst BRICS expansion, Brazil’s ability to navigate geopolitical complexities will be critical. Additionally, its growing adoption of cryptocurrency positions Brazil as a significant player in the digital currency sector.
Original Source: www.cointrust.com
