Brazil Leads BRICS in Blockchain Push for Cross-Border Trade
1min read Brazil has taken the lead in exploring blockchain technology to enhance cross-border trade among the BRICS nations—Brazil, Russia, India, China, and South Africa. This initiative, spearheaded during Brazil’s presidency of the bloc, aims to streamline and increase the transparency of international transactions, marking a shift from previous discussions about creating a unified currency.
The focus of this new approach is on improving the speed and clarity of payment processes rather than on monetary unification. Brazil’s Central Bank has been actively piloting a digital infrastructure project called drex, designed to support tokenized cross-border transactions. This project aligns with the country’s broader ambitions to integrate blockchain technology into its financial systems.
The proposed payment system could leverage technology that mirrors the speed and programmability of cryptocurrencies, potentially revolutionizing how international transactions are handled. However, the implementation of such a system faces challenges, particularly in balancing privacy with regulatory oversight. Another approach under consideration involves developing a system similar to Brazil’s Pix, which enables real-time digital payments.
During a meeting in March 2024, BRICS representatives outlined plans to establish a blockchain-powered payment system that integrates digital currencies. This initiative is seen as a strategic move to reduce the reliance of BRICS nations on the U.S. dollar in global trade. Russian President Vladimir Putin, speaking at the BRICS Business Forum in October 2024, emphasized the role of digital currencies in strengthening financial independence among BRICS and other emerging economies.
Putin highlighted that BRICS has introduced a financial messaging system comparable to SWIFT and has begun testing national digital currencies to support large-scale economic projects. A collaborative study by the Russian Ministry of Finance, the Bank of Russia, and the law firm Yukov and Partners examined the potential of blockchain-based state-issued digital currencies in strengthening financial self-sufficiency across BRICS nations.
Findings from the study suggest that shifting a significant portion of cross-border transactions to blockchain could result in substantial annual savings for BRICS nations. Brazil has previously explored blockchain integration, as seen in a 2023 initiative led by payments giant visa. In partnership with Agrotoken, microsoft, and Sinqia, Visa piloted the initiative using a Universal Payment Channel (UPC), seeking to streamline transactions for small-scale farmers and agribusinesses.
Adopting blockchain in cross-border trade may streamline processes by reducing reliance on traditional intermediaries, creating secure, unchangeable records, and nudging regulators to refine digital finance policies. Blockchain’s traceable ledger may push financial regulators to update oversight, providing real-time audit trails while testing compliance structures and altering standard reporting systems. This shift tests old norms and could ease cross-border payments among BRICS nations by reducing friction, fostering transparent transactions, and prompting economic adaptability in global trade networks.
