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- BRICS countries are exploring blockchain tech to boost trade and reduce dependency on the U.S. dollar.
- A new bill in Brazil proposes crypto-based payments, allowing workers to receive wages in cryptocurrency.
- Drex and Pix systems could enhance BRICS trade, but challenges in governance and privacy persist.
Brazil is working together with other BRICS countries in an effort to make use of blockchain technology in international trade with countries like Russia, India, China, etc. As Brazil leads the presidency of BRICS for this year, there are growing discourse over digital financial integration. The IMF’s initial purpose is the promotion of the efficient international monetary cooperation and the minimization of the influence of the American dollar in it. This is in line with Brazil’s intention to improve on its financial system and integrate it with the rest of the countries in the bloc.
Brazil’s Crypto Payment Bill
One of the most important components of this process is a bill submitted to the Chamber of Deputies by Brazilian deputy Luiz Philippe de Orleans e Bragança. The bill will govern use of crypto-based payments at the workplace, letting employees receive 50% of their wages in cryptocurrency if they and their employer are fine with it. This bill falls under the ongoing endeavor by the government of Brazil to integrate the use of blockchain in its financial system.
This proposal is different from previous debates about some sort of BRICS currency. It is not meant to threaten the dollar’s hegemony in the global economy by any means. Instead, Brazil is interested in employing the blockchain in improving the trade in the member countries of the BRICS.
BRICS Financial System Innovation
According to the report, it has been experimenting with Drex, an application for tokenization of financial processes and operations in Brazil. Drex has also demonstrated the possibility of establishing a better logistics of the financial services. However, the concern with relevancy in privacy and regulation remains a concern. Nevertheless, what these challenges mean is that through integrating Drex, the buying and selling between the BRICS countries could be made easier by offering a safer method of transacting.
Another considered solution is to establish a blockchain-based system such as Pix launched in Brazil. There is a possibility that this system enhances the current cross-border payments within the BRICS, cutting down the time and costs. But, still sovereignty and governance controversies are prevailing. The member countries need to come up with ways and means of implementing and supervising the system.
