BRICS explores blockchain and crypto to reduce reliance on the US dollar in trade.
Brazil leads a blockchain-based payment initiative, while Russia already uses crypto for transactions.
Stablecoins and CBDCs emerge as potential settlement solutions within the BRICS bloc.
The BRICS economic bloc, comprising Brazil, Russia, India, China, and South Africa, is shifting increasingly towards cryptocurrency, as well as blockchain payment systems to facilitate cross-border trade.
While the coalition is looking for ways to reduce the use of the US dollar for foreign trade, some of the member countries are gravely considering stablecoins and other cryptocurrencies as serious substitutes.
Brazil Blockchain Initiative on BRICS
Brazil, which assumes the BRICS Presidency in January 2025, is reported to be formulating a plan for a blockchain payment system within the bloc.
The Brazilian administration plans to consider the proposal during the summit, which is held yearly in Rio de Janeiro in July, as local news reports indicate. If implemented, the system would provide a secure, open, and cost-effective financial infrastructure designed to simplify transactions among member countries while significantly reducing costs.
Brazil’s central bank has previously tested Drex, a tokenized financial transaction infrastructure. However, there are still concerns regarding privacy and regulatory management.
The nation’s goal is to make trade more efficient, not to introduce a new currency to replace the US dollar.
Russia’s Crypto Transactions
Russia has already taken a step in using cryptocurrencies for international trade. Russian oil firms are using Bitcoin, Ethereum, and stablecoins to swap Chinese yuan and Indian rupees for rubles, making it convenient for BRICS countries to carry out transactions.
Stablecoins and CBDCs as Alternatives
While there has not been an official decision about issuing a BRICS crypto token, discussions have centered around utilizing existing CBDCs and stablecoins in the settlements.
In April 2024, Russian Deputy Foreign Minister Sergey Ryabkov made proposals that stablecoins could be used for cross-border settlements between BRICS.
As the BRICS coalition expands, with the addition of new BRICS partner nations such as Egypt, Iran, and the UAE, the adoption of crypto and blockchain-led solutions represents a further broader shift in global patterns of trade.
Stablecoins, CBDCs, or an independent BRICS digital currency, thus it is poised to be the group’s financial door to the future.
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