BRICS member Brazil, along with two other countries has forged a new path for cross-border payments with CBDC innovations. The Central Banks of the three countries have officially partnered to create a digital currency for trade among each other. The move will pave the way for a new financial infrastructure without the need for the US dollar for cross-border transactions.
Also Read: BRICS: Shipping Firm Pays $8 Billion in Chinese Yuan, Ditch US Dollar
Read here to know how many sectors in the US will be affected if BRICS ditches the dollar for trade. Apart from using local currencies for global trade settlements, BRICS is also working towards the formation of CBDC to dent the US dollar. The next decade will be challenging times for the greenback as de-dollarization will be a global phenomenon.
BRICS: 3 Countries Forge CBDC Alliance, US Dollar Remains Target
The Hong Kong Monetary Authority (HKMA) announced that it has forged a CBDC alliance with two other Central Banks to usher in cross-border tokenization of payments with Bank of Thailand (BOT) and Brazil’s Banco Central do Brazil (BCB). The development is in line with the BRICS agenda of de-dollarization where the CBDC currency will challenge the US dollar.
Also Read: BRICS: JP Morgan Predicts the Future of the US Dollar
The digital currency partnership will see the three Central Banks work closely on developing a CBDC to facilitate trade payments. “This partnership will significantly advance tokenization efforts in our financial sectors, both domestically and cross-border, by offering broader insights into tokenization, as different technical designs, business requirements, and regulatory frameworks of each jurisdiction will be taken into account,” said BOT executive Alisara Mahasandana.
Also Read: De-Dollarization: These 5 ASEAN Nations May Soon Dump The US Dollar
Apart from these three Central Banks, even BRICS member Russia is working towards a new CBDC for trade settlements. The BRICS bloc could soon begin trading in tokenized digital currencies after its launch ending dependency on the US dollar. The future of the greenback looks grim unless drastic measures are taken by the White House.