Welcome to Latam Insights Encore, a deep dive into Latin America’s most relevant economic and cryptocurrency news from last week. In this edition, we examine the recent movements by Brazil to further push de-dollarization within BRICS and how this might affect the trading framework of the entire bloc.
Latam Insights Encore: Brazil Called to Lead BRICS De-Dollarization Push Under Lula’s Leadership
Brazil will be the main catalyst behind the new de-dollarization projects within the BRICS organization. The country, which has repeatedly called for dethroning the U.S. dollar as a world currency due to the troubles it might present with independent countries, is already pushing for advancing these policies in the upcoming BRICS bloc summit celebrated in Kazan.
Last week, Brazil’s Foreign Affairs Secretary for Asia and the Pacific Eduardo Paes Saboia confirmed that the nation was moving in this direction as part of the measures that BRICS countries affected by sanctions are taking to regularize their trade transactions.
He stated that these measures had “already been considered at meetings of finance ministers and heads of central banks,” and that Brazil would be behind this new push. At the BRICS Business Forum on October 17 and 18 in Moscow, a payment system called BRICS Pay was unveiled, featuring a card and an app to transact, with participants being able to demo the system.
Read more: Brazil Pushes BRICS to Shift From US Dollar, Advocating National Currencies in Global Trade
However, developing and incentivizing the usage of BRICS Pay will be in the hands of Brazil, which will assume the organization chairmanship next year. This is the path the nation will follow, as President Luiz Inacio Lula Da Silva is also a proponent of de-dollarization, having called openly for dropping the U.S. currency as a world reserve currency.
In 2023, Lula hinted at the creation of a BRICS currency to streamline international trade, stating:
Who decided that our currencies were weak or valueless in other countries? Why can’t a bank like that of the BRICS have a currency to finance trade relations between Brazil and China or Brazil and other countries?
Read more: Brazil’s President Lula Urges Developing Countries to Abandon Dollar as Global Reserve Currency
Brazil’s actions will likely lead the BRICS organization to a new level of independence, which will contribute to establishing the bloc as an even greater force to reckon with in international trade. BRICS Pay and its future implementation will also grow next year, with the possibility of slowly changing the trading patterns with the group’s financial influence.
What do you think about Brazil as the leading force behind BRICS de-dollarization movements? Tell us in the comments section below.
