BRICS Launches Decentralized Payment System to Bypass the US Dollar

• BRICS has launched DCMS, a decentralized cross-border payment system.
• The DCMS is based in Brazil and utilizes Pix instant transfer technology.
• BRICS’ latest initiative target reduction in USD dependence for cross-border payments.

BRICS, an intergovernmental organization comprising major economies across multiple continents, has introduced a new payment system, DCMS. The new system is based in Brazil and aims to facilitate cross-border trade settlements without relying on the US dollar.

BRICS Aims to Reduce USD Dependence

According to reports, the DCMS utilizes Pix instant transfer technology and operates on a decentralized blockchain network. The solution connects major member states while integrating local currencies and digital national currencies.

In the meantime, the latest move by BRICS is adding to the pressure on the US dollar, which is under increasing negative sentiment from investors. Most of them support the BRICS’ initiative to minimize dependence on traditional dollar-based systems. They consider it an ideal move to enhance trade efficiency and reduce reliance on the US dollar.

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The US Dollar’s Protracted Dominance

It is worth noting that the US dollar maintains a dominant status as a tool for cross-border settlement. It accounts for roughly 40-58% of international transactions, acting as the primary medium of exchange, unit of account, and store of value. Some notable features of the US dollar’s current role in global finance include its market dominance, amounting to nearly half of all cross-border loans and international debt securities.

The US dollar is used in over 50% of global trade invoicing, while approximately 95% of USD payments go through the Clearing House Interbank Payment System (CHIPS). Hence, the dollar’s role allows for significant US influence over global financial conditions, including the use of sanctions. 

What Should the People Expect?

Considering the current trends in global finance and the socioeconomic war between the US and some global financial giants, the latest initiative by BRICS could disrupt global finance and trigger reactions. Although the solution claims to run on a decentralized blockchain technology, it is bound to be scrutinized by contemporary nations and organizations, potentially leading to another round of global socioeconomic rebalancing that could define the next era of world finance.

Related :  India Pushes BRICS Digital Currency Links to Ease Cross-Border Payments