- Brazil explores blockchain to enhance BRICS trade and reduce reliance on the U.S. dollar.
- A proposed bill may allow Brazilian workers to receive 50% of wages in cryptocurrency.
- BRICS nations consider blockchain-based payment networks to improve transaction speed.
Brazil is considering blockchain technology to improve trade within BRICS, the economic bloc that includes Russia, India, China, and other members. As Brazil takes on its year-long presidency of BRICS, discussions about digital financial integration are gaining traction. According to reports, the primary goal is to streamline international transactions and reduce dependence on the U.S. dollar.
Crypto Payment Bill Proposed
A key element of this initiative is a bill proposed by Brazilian Deputy Luiz Philippe de Orleans e Braganca. The legislation would aim at crypto-based payments and allow employees to be paid up to half their salary in digital currencies, provided both parties agree. This proposal fits within the Brazilian strategy to incorporate blockchain into financial management to enhance security and prompt the execution of transactions.
This proposal differs from past discussions on a common BRICS currency and isn’t aimed at challenging the US dollar. Those involved in the negotiations emphasized that this was not a plan to establish another world currency that rivaled the American currency. However, to improve trade relations between BRICS countries, Brazil works to build blockchain-based financial platforms.
Drex Faces Regulatory Challenges
As a pilot project, the Central Bank of Brazil has worked on Drex, a tokenized transaction financial system. While it raises concerns regarding privacy and regulatory oversight, it also has the potential to facilitate trade among BRICS countries by providing a secure and efficient means of conducting transactions.
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Another option is creating a blockchain-based network like Pix, an instant payment system used in Brazil. This would assist in enhancing cross-border payments within the BRICS in terms of time and cost. However, issues of governance and sovereignty are still present as member countries discuss how best to regulate the system.
According to reports on March 14, Russian oil firms were already employing stablecoins to convert the Chinese yuan and Indian rupees to roubles. This shows that the use of digital assets is gaining significance in the international trade system. As Brazil takes the helm in the BRICS, blockchain may redefine the financial landscape of this bloc. The next months will define in which way BRICS will use this technology to improve cooperation in the sphere of economy.
