Brazil Advances Blockchain Payment System Proposal for BRICS

Brazil is proposing a blockchain payment system for BRICS to enhance trade and reduce transaction costs. The initiative, discussed at the July BRICS summit, does not aim for a shared currency and seeks to avoid provoking U.S. responses. As BRICS expands, Brazil’s role in cryptocurrency adoption is also noteworthy.

Brazil is advancing a proposal for a blockchain-based payment system aimed at enhancing the economic interactions among member nations of the BRICS bloc. This initiative seeks to facilitate cross-border transactions, reduce associated costs, and enhance financial efficiency. Officials have clarified that this effort does not intend to rival the established dominance of the U.S. dollar as Brazil takes on the presidency of BRICS.

Expectations are that Brazilian representatives will present this proposal at the upcoming BRICS summit scheduled for July in Rio de Janeiro. The envisioned payment system is designed to improve trade relations among BRICS countries, including China, Russia, India, and South Africa, by streamlining contract processes for imports and exports while also lowering transaction costs. However, details on how blockchain technology will specifically be implemented remain undisclosed.

Notably, the current proposal does not advocate for a common BRICS currency, a notion previously promoted by Dilma Rousseff, chair of the BRICS New Development Bank. Moreover, Brazilian President Luiz Inácio Lula da Silva has disassociated from prior discussions about creating an alternative currency to the U.S. dollar in global trade.

Despite these clarifications, apprehensions persist regarding potential repercussions from the United States. A former U.S. president, who is now campaigning for re-election, has indicated that he might impose 100% tariffs on nations endorsing alternatives to the U.S. dollar. To alleviate possible economic backlash, Brazil is expected to frame its blockchain payment initiative cautiously.

As BRICS expands to encompass new members including Saudi Arabia, Egypt, the UAE, Ethiopia, Iran, and Indonesia, the need for a more efficient cross-border payment solution has heightened. Brazil’s ability to manage the resultant economic and geopolitical challenges remains to be seen. Simultaneously, Brazil is solidifying its role in the global cryptocurrency landscape, with 26 million citizens, or about 12% of the population, now owning cryptocurrencies, marking it as one of the leaders in digital asset adoption worldwide.

In summary, Brazil’s proposed blockchain-based payment system for BRICS aims to facilitate cross-border transactions and reduce costs without challenging the U.S. dollar’s dominance. The discussions at the upcoming BRICS summit will focus on enhancing trade among member nations. While the proposal does not introduce a common currency and attempts to mitigate U.S. economic reactions, Brazil’s increasing cryptocurrency adoption signifies its growing influence in global financial systems.

Original Source: www.cointrust.com