For the adoption of cryptocurrencies, the recent declaration by China and Russia that they are accelerating efforts to build a BRICS payments system is encouraging. The system would enable frictionless trade between the BRICS nations (Brazil, Russia, India, China, and South Africa) using their own national currencies, with the aim of unseating the US dollar as the world’s reserve currency. This would lessen reliance on the US dollar and perhaps stimulate interest in cryptocurrencies, which operate independently of the government.
The “cutting-edge” new payment infrastructure may be unveiled following the BRICS conference. The following BRICS summit will take place in August 2023 in Cape Town, South Africa. Whereby, Brazil, Russia, India, China, and South Africa will then collectively choose a new currency for international trade.
Positive Impacts
There are a number of reasons why the BRICS payments system might favorably affect the uptake of cryptocurrencies. First of all, it would offer a safer and more reliable currency than the US dollar. A number of issues, such as the nation’s significant budget deficit and trade deficit, have contributed to the US dollar losing value in recent years. The use of the dollar as a reserve currency has become more challenging as a result. As it would be supported by the combined economies of the BRICS countries, the BRICS payments system would offer a more reliable and secure alternative.
Second, commerce between companies would be made simpler by the BRICS payments system. Businesses currently have to go through a variety of middlemen in order to transact with each other in different currencies, which may be costly and time-consuming. Businesses would save time and money by trading directly with one another thanks to the BRICS payment system. This could result in greater economic growth by facilitating business expansion into new markets.
The BRICS payments system is generally a good thing for the uptake of cryptocurrencies. The system would make it simpler for firms to conduct worldwide trade and for people to send and receive money globally. It would also offer a more reliable and secure alternative to the US currency. These elements might enhance interest in cryptocurrency and hasten the uptake of this novel technology.
Although it is still in its infancy, the BRICS payments system has the potential to be a game-changer for the uptake of cryptocurrencies as it shows slight similarities with the Ideology if cryptocurrencies and blockchain technology.
Disclosure: This is not trading or investment advice. Always do your research before buying any cryptocurrency or investing in any projects.
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