Brazil Proposes Blockchain-Based Payment System for BRICS Economic Bloc

Brazil is proposing a blockchain-based payment system within the BRICS economic bloc to streamline cross-border transactions and reduce costs. The initiative, set for discussion at the upcoming summit in July, does not include a shared currency. Amid concerns of U.S. retaliation, Brazil seeks to enhance trade efficiency, as it solidifies its role in the cryptocurrency market with a substantial portion of its population owning digital assets.

Brazil is advancing a proposal to establish a blockchain-based payment system within the BRICS economic alliance, aiming to facilitate cross-border transactions while reducing costs. As Brazil takes the helm of the BRICS presidency, officials assert that this initiative will not challenge the supremacy of the U.S. dollar.

Recent reports indicate that Brazilian representatives intend to present this proposal at the forthcoming BRICS summit in July, set to occur in Rio de Janeiro. The proposed system seeks to enhance trade relations among member states, such as China, Russia, India, and South Africa, by simplifying import-export processes and curtailing transaction fees. However, details regarding the application of blockchain technology remain undisclosed.

Notably, the plan does not entail the creation of a shared BRICS currency, a notion previously endorsed by Dilma Rousseff, the head of the BRICS New Development Bank. Additionally, Brazilian President Luiz Inácio Lula da Silva has distanced himself from earlier ideas advocating for a dollar alternative in international trade.

Concerns linger about potential repercussions from the United States; a former U.S. president, currently in a re-election campaign, has suggested implementing tariffs on countries promoting alternatives to the dollar. To mitigate this risk, Brazil aims to introduce the blockchain-based payment system in a way that mitigates the potential for economic retaliation from Washington.

With the expansion of BRICS to include nations such as Saudi Arabia, Egypt, the UAE, Ethiopia, Iran, and Indonesia, demand for a more efficient and cost-effective cross-border payment solution is on the rise. The ability of Brazil to navigate these economic and geopolitical challenges remains uncertain.

Nevertheless, Brazil continues to bolster its presence in the global cryptocurrency space, emerging as a leader in digital asset adoption. Approximately 26 million Brazilians, equating to 12% of the population, possess cryptocurrencies, positioning Brazil among the top countries globally in terms of crypto adoption and underscoring its rising influence in this sector.

In conclusion, Brazil’s proposal for a blockchain-based payment system aims to optimize cross-border transactions within the BRICS bloc while minimizing challenges posed by the U.S. dollar’s dominance. This initiative, presented at the upcoming BRICS summit, seeks to enhance trade efficiency among member nations without introducing a common currency. Brazil’s proactive approach may mitigate economic repercussions from the U.S. while highlighting the nation’s significant presence in the global cryptocurrency market.

Original Source: www.cointrust.com