Brazil is stepping up a digital currency initiative, including a blockchain payment system, to promote international trade during its BRICS presidency this year.
According to local media, this will be one of the top priorities for South America's largest economy within the BRICS framework.
According to O Globo, the Brazilian government is planning to propose using digital currency as a solution for international payments, not only within BRICS but also with external partners. Brazil will focus on reducing dependence on the US dollar while accelerating financial transactions between member countries.
Previously, there were many opinions that BRICS could create a common currency backed by gold to counter the USD. However, instead of developing a new currency, BRICS is aiming to build a more efficient payment system, taking advantage of national digital currencies or stablecoin - which have been used in many unofficial international transactions.
US President Donald Trump has opposed BRICS' intention to abandon the USD, even warning of a 100% tax if the group replaces the USD with another currency. However, the strong development of digital payment systems, such as Brazil's Pixar system, is opening up new directions for countries looking to escape the financial influence of the West.
Russian officials confirmed that BRICS is prioritizing this issue and conducting discussions to determine the optimal option. Russian Foreign Minister Sergei Lavrov recently emphasized that Brazilian President Luiz Inacio Lula da Silva has proactively promoted the cross-border payment initiative, established a BRICS reinsurance company and built a BRICS Clear payment infrastructure.
US economic sanctions have boosted the use of cryptocurrencies in many BRICS member states. Typically, Russia - a country that is increasingly using Bitcoin and other digital assets to conduct international transactions, to avoid the West-controlled SWIFT system.
Russia has previously been strict with digital currency, but has now revised regulations to allow the use of digital currency in trade and exploitation, to reduce dependence on the Western financial system.
Although Bitcoin is being used by sanctioned countries as a tool against US control, the large volatility of this digital currency makes it difficult to become a stable payment method.
Meanwhile, Stablecoin - a cryptocurrency with real asset value - sets an interesting paradox. Although considered an alternative to the traditional financial system, most of today's Stablecoin is still tied to the USD.
Although BRICS wants to reduce the influence of the US dollar, without a real alternative, these initiatives could unintentionally further strengthen the greenback's position.
The debate on de-dollarization through cryptocurrency is far from over. Bitcoin may be an option to avoid sanctions, but it is not yet stable enough to become a true reserve currency.
Meanwhile, to change the global financial order, BRICS will need more than a digital revolution.
In Vietnam, representatives of the State Bank have repeatedly sent out the message: Bitcoin and other similar virtual currencies are not legal currencies and payment methods.
However, in the recently issued Directive No. 05/CT-TTg, Prime Minister Pham Minh Chinh directed the Ministry of Finance and the State Bank to submit a proposal for a legal framework on digital currency in March.
