Brazil Proposes Blockchain Payment System to Strengthen BRICS Cooperation

Brazil is proposing a blockchain-based payment system for BRICS countries to reduce reliance on the US dollar in cross-border transactions. This initiative, discussed during the upcoming BRICS summit, seeks to provide a secure financial infrastructure while enhancing transaction efficiency and lowering costs. Despite US opposition, Brazil aims to frame the initiative positively without directly challenging the dollar’s dominance.

Brazil is reportedly drafting a proposal for a blockchain-based payment system intended for internal transactions within the BRICS economic bloc. Established in 2009, BRICS comprises Brazil, Russia, India, China, and South Africa, with Egypt, Ethiopia, Iran, and the UAE having joined recently. Brazil assumed the BRICS Presidency on January 1 and is set to host the annual summit in July, where blockchain payment discussions will take center stage, according to a report from O Globo.

The proposed payment system aims to enhance security, transparency, and permanence across financial infrastructures among BRICS nations. It is believed that the introduction of such a system might drastically reduce transaction processing times and costs among member countries. However, the decision on whether to utilize a new crypto token or existing stablecoins and CBDCs for this system remains unclear.

The initiative was first proposed by Russia in March 2024 as a strategy to diminish reliance on the US dollar for internal settlements, driven by various factors, including US interest rate hikes and sanctions against Russia and China. Yury Ushakov, an advisor to President Putin, indicated that this system could help mitigate US-driven financial politics and facilitate smoother cross-border transactions.

US President Donald Trump has publicly opposed the BRICS coalition’s attempts to diminish the US dollar’s dominance, even threatening to increase tariff rates against the BRICS nations by 100%. Nevertheless, Brazil is reported to be promoting the blockchain payment platform as a means to simplify cross-border transactions rather than replacing any existing currency, in an effort to avoid provoking the United States.

Furthermore, the BRICS bloc is experiencing growth, having recently welcomed Belarus, Bolivia, Kazakhstan, Cuba, Malaysia, Thailand, Uganda, Uzbekistan, and Nigeria as partner nations. Approximately 30 additional countries have expressed interest in joining the organization, showcasing its expanding global influence.

By proposing a blockchain payment system, Brazil aims to reduce dependence on the US dollar while fostering economic collaboration within the BRICS bloc. The system’s anticipated benefits include improved transaction efficiency and cost reduction among member countries. Although met with opposition from the US, Brazil intends to present this initiative as a means to facilitate cross-border trade rather than challenge existing currencies. The ongoing expansion of BRICS underlines its increasing significance in global economic dynamics.

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