Brazil’s BRICS presidency is placing a strong emphasis on utilizing blockchain technology for cross-border trade, according to a recent report. The country, which took over the presidency of the BRICS bloc in January, is reportedly exploring the potential benefits of blockchain in improving trade transactions among its fellow members – Russia, India, China, and others.
This shift towards blockchain comes as a departure from previous discussions about the possibility of a joint currency for BRICS. Sources close to the matter have indicated that Brazil’s intention is not to create a currency to rival the US dollar, but rather to enhance the efficiency of international transactions within the bloc.
One potential avenue for implementing blockchain technology in Brazil’s financial system is through the Drex project, which aims to create a tokenized infrastructure for financial transactions. However, the project is said to be facing challenges in finding the right balance between privacy and regulatory oversight.
Another option being considered is a network similar to Brazil’s existing Pix system, although concerns have been raised about governance and the sovereignty of participating countries. In the past, Russian officials have suggested that stablecoins could play a role in facilitating international settlements among BRICS members, but no official decision has been made on this front.
In a sign of the growing adoption of cryptocurrencies and stablecoins in international trade, Russian oil firms have reportedly been using these digital assets to convert Chinese yuan and Indian rupees into roubles. This development underscores the potential for blockchain technology to streamline cross-border transactions and reduce reliance on traditional currencies.
Overall, Brazil’s focus on blockchain for BRICS cross-border trade reflects a broader trend towards digital innovation in the global economy. As the country continues to explore the possibilities of blockchain technology, it remains to be seen how this shift will impact the future of international trade within the BRICS bloc.