Brazil is proposing a blockchain-based payment system for BRICS, aimed at enhancing cross-border transactions and lowering costs without challenging the U.S. dollar’s dominance. The initiative will be discussed at the upcoming BRICS summit in July. Notably, there are no plans for a common BRICS currency. Brazil continues to advance its position in the cryptocurrency market, with over 12% of its population owning cryptocurrencies.
Brazil’s proposal to implement a blockchain-based payment system within the BRICS economic bloc aims to enhance efficiency in cross-border transactions while reducing costs. As Brazil assumes the presidency of the BRICS, officials have stressed that the initiative does not intend to undermine the U.S. dollar’s dominance.
At the forthcoming BRICS summit in July, scheduled in Rio de Janeiro, Brazilian representatives will present discussions concerning this payment system. It is anticipated that the system will facilitate trade among member nations such as China, Russia, India, and South Africa by simplifying import-export processes and minimizing transaction fees, although detailed technical applications have yet to be revealed.
Crucially, the proposal does not include the creation of a common BRICS currency, thereby moving away from ideas previously endorsed by Dilma Rousseff of the BRICS New Development Bank. Furthermore, Brazilian President Luiz Inácio Lula da Silva has distanced himself from prior proposals to create alternatives to the U.S. dollar in international markets.
Despite clarifications on the proposed system, concerns regarding potential backlash from the United States persist. A former president, who is campaigning for re-election, has threatened to impose steep tariffs on nations endorsing dollar alternatives. To address these issues, Brazil plans to introduce the blockchain payment system in a way that minimizes the possibility of economic repercussions from the U.S.
With the recent expansion of BRICS to include countries like Saudi Arabia, Egypt, the UAE, Ethiopia, Iran, and Indonesia, there is a heightened demand for effective and economical cross-border payment solutions. The complexity of navigating this landscape remains a challenge for Brazil.
In parallel with these developments, Brazil continues to fortify its standing in the global cryptocurrency landscape. It has emerged as a prominent player in digital asset adoption, boasting approximately 26 million cryptocurrency owners—about 12% of its population. This positions Brazil among the leading nations in crypto adoption, reflecting its growing influence in this emerging sector.
In summary, Brazil’s initiative for a blockchain-based payment system within the BRICS framework seeks to facilitate cross-border transactions while mitigating costs. The project does not propose a common currency and aims to maintain alignment with the U.S. dollar. With increasing membership in BRICS and burgeoning cryptocurrency adoption, Brazil’s challenges include navigating potential geopolitical repercussions from the U.S. and effectively addressing the demands for efficient payment systems.
Original Source: www.cointrust.com
