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BRICS launched DCMS, a cross-border decentralized payment system.
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The DCMS, based in Brazil, uses Pix instant transfer.
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The latest initiative by the BRICS aims to reduce USD dependence in cross-border payments.
BRICS (an intergovernmental organization that comprises major economies on multiple continents) has introduced a DCMS, a new payment method. The new system, based in Brazil, aims to facilitate the settlement of cross-border trade without relying on US dollars.
BRICS Aims at Reducing USD Dependence
Reports claim that the DCMS uses Pix instant transfer and operates on a blockchain decentralized network. The solution integrates local currencies with digital national currencies, while connecting major member states.
Investors are increasingly negative about the US dollar as a result of the latest BRICS move. The majority of them support BRICS initiative to reduce dependence on traditional dollar based systems. They see it as a great way to improve trade efficiency and reduce dependence on the US dollar.
Related : Will India’s private crypto market be squeezed out by the BRICS CBDC network?
The US Dollar’s Protracted Dominance
It is important to note that the US Dollar continues to be a dominant tool for cross-border settlement. It is the main medium of exchange, unit for accounting, and store of wealth, accounting for 40-58% of all international transactions. The US dollar’s role in global finance is characterized by its dominance on the market, which amounts to nearly half of cross-border debt securities and loans.
Over 50% of global trade invoices are in US dollars, and approximately 95% of USD payment go through Clearing House Interbank Paying System (CHIPS). The dollar’s influence on global financial conditions is significant, and sanctions are often used.
What should the people expect?
The latest initiative of BRICS, considering the current trends in global finances and the socioeconomic warfare between the US and certain global financial giants could disrupt global finance. The solution, which claims to be based on decentralized blockchain technology will undoubtedly be scrutinized by modern nations and organizations. This could lead to a new round of global socioeconomic rebalancing, which could define the next phase of world finance.
Related:India Pushes Digital Currency Links with BRICS to Ease Border Payments
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