The BRICS economic alliance has recently discussed their crypto-powered BRICS payment initiative as a substitute for the Western SWIFT payment system. However, there’s now a conversation about the potential incorporation of Bitcoin into this initiative. The US dollar has seen significant appreciation in value relative to the currencies of the BRICS nations, whereas Bitcoin has exhibited strong performance. Could this digital asset serve as a catalyst for the development of a new global payment system?
The economic alliance has recently expressed its interest in exploring the integration of digital assets into BRICS payments. Furthermore, this move represents a significant technological advancement in the rapidly evolving financial landscape, one that could potentially compete with SWIFT and counteract the geopolitical leverage associated with the US dollar.
Crypto’s Role in the Future of BRICS Payments
Since expanding to include six countries, the BRICS alliance has been contemplating the establishment of its proprietary payment system. In fact, the economic coalition has explored the idea of creating an alternative to SWIFT, which could be adopted collectively. However, given the superior performance of the US dollar compared to all BRICS currencies, it may be prudent for them to explore alternatives beyond traditional fiat currencies.
The emerging BRICS payment system could greatly benefit from the incorporation of Bitcoin. This idea has emerged from the bloc’s own acknowledgment of the need to explore the integration of cryptocurrencies. Furthermore, the global financial landscape has increasingly shifted its focus toward the development of cryptocurrency. As a result, with various nations engaging in discussions about Central Bank Digital Currencies (CBDCs), BRICS could leverage similar technology.
A recent report reveals that over the past decade, the US dollar has experienced a significant loss in value, approximately 99.5%, when compared to Bitcoin. While the US dollar continues to outperform many other assets, it has proven to be a formidable competitor against the most prominent digital asset in the market. For BRICS to integrate a similar blockchain-based asset, it could signify a significant step forward.
Moreover, this approach could address the issue of finding an alternative currency for the economic alliance. The world had been anticipating the development of a gold-backed BRICS alternative, but progress on that front appears to have stalled. Now, the creation of a digital asset potentially linked to gold could present a promising alternative for both currency and a payment system.