BRICS Alliance Considers Creating New Currency

The world’s economic powerhouses appear to be distancing themselves from US dollar hegemony as they look to create a new world order. The BRICS alliance, which is made up of Brazil, Russia, India, China, and South Africa, is reportedly working on creating its own currency, according to State Duma Deputy Chairman Alexander Babakov. The move is seen as a way for the BRICS nations to promote their shared objectives and distance themselves from US dollar hegemony.

Speaking at the St. Petersburg International Economic Forum event in New Delhi, India, Babakov stressed the importance of both nations working towards a new medium for payments. He added that digital payments could be the most promising and viable option. The new currency is expected to benefit China and other BRICS members, rather than the West.

Babakov went on to postulate that the new currency would be secured by gold and other commodities such as rare-earth elements. This move would further cement the new currency’s value and provide a more stable platform for transactions. The BRICS alliance is seen as a viable alternative to the US dollar hegemony, and the creation of a new currency could provide a way to challenge the current financial system.

This week, former Goldman Sachs chief economist Jim O’Neill called on the BRICS bloc to expand and challenge the dominance of the dollar. In a paper published in the Global Policy journal, he wrote that “the U.S. dollar plays a far too dominant role in global finance.” The BRICS nations appear to be taking this advice to heart and are exploring ways to distance themselves from the current system.

In a related development this week, China and Brazil reached a deal to trade in their own currencies. The move will remove the US dollar as the intermediary, further empowering both nations to distance themselves from the world’s reserve currency. The agreement will enable China and Brazil to conduct trade and financial transactions directly, without having to go through the greenback.

China is already leading the way in the development of its central bank digital currency project, and crypto adoption in Brazil is growing following the legalization of it as a payment method in the country late last year. This move further underscores the growing interest in creating alternative currencies to challenge the US dollar’s hegemony.

While the US continues its war on crypto, financial regulators are tightening the screws on the embryonic industry. This move is seen as a way to maintain the US dollar’s dominance and prevent the emergence of alternative currencies. However, the BRICS alliance and other emerging economies appear to be forging ahead with their plans to create a new financial order, one that is more equitable and better suited to their needs.

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Dock Plans to Use Cryptos for International Money Transfers: Reuters

Brazilian financial services platform Dock offers solutions for the entire digital payments ecosystem, according to Reuters. The company, formerly Conductor Technology, plans to utilise cryptocurrencies for international remittances and to expand markets in the Latin American and European regions.

The company said it would convert Brazilian reals to bitcoin first and then to another country’s currency for international remittances.

To end-users via Dock clients such as Vivo or Natura, Capitals will be reached.

Frederico Amaral, head of product and technology at Dock, said in an interview:

“It will be both a quick and cheap way of making remittances.”

According to CrunchBase, Dock has raised a total of $170M in funding over three rounds. Their latest funding was raised on Oct 30, 2020, from a Private Equity round.

Also, on Dec 7, 2021, Dock announced the acquisition of Mexican card processing startup Cacao. The move was Dock’s first acquisition out of Brazil,

CEO of Dock Antonio Soares said:

“The two companies share significant values ​​and a core mission to enable their clients to democratize, through technology, access to the financial system for the millions of unbanked and underbanked people in Latin America.”

Last month, Dock also received Brazil’s central bank approval to acquire rival Brasil Pré-pagos (BPP) with a financial institution license.

Image source: Shutterstock

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Visa Teams Up With Consensys To Build Payment Infrastructure For CBDCs

Visa and ConsenSys, a blockchain software startup, are working to develop a central bank digital currency (CBDC) pilot program to explore retail applications such as cards and wallets.

Both firms will first meet with an estimated 30 central banks to discuss the goals that governments hope to achieve with government-backed digital currency. The pilot program is scheduled to begin in the spring of this year.

Visa To Pilot CBDC In Select Countries

Visa (V) announced on Thursday that it will take its crypto services to the next level by teaming with blockchain software company Consensys to create a central bank digital currency onramp (CBDC).

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The payments giant plans to launch a “CBDC sandbox” in the spring, where central banks can try out the technology after minting it on Consensys’ Quorum network.

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Visa Trades At $214. Source: TradingView

Customers will be able to use their CBDC-linked Visa card or digital wallet anyplace Visa is accepted globally, according to Catherine Gu, Visa’s head of CBDC, who spoke with ConsenSys in a blog post Q&A.

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Gu Said:

“If successful, CBDC could expand access to financial services and make government disbursements more efficient, targeted and secure – that’s an attractive proposition for policy makers.”

A CBDC is a type of central bank obligation that is issued in digital form and can be used by the general public, comparable to the US dollar.

Related article | Visa Survey Shows Crypto Payments Could Boom In 2022

Countries Are Launching CBDCs

The decision comes as regulators around the world struggle to figure out how to treat CBDCs in a changing financial landscape dominated by cryptocurrencies. The notion that crypto and digital money will upend financial markets or replace fiat currency is a major issue.

Mastercard also announced the launch of a CBDC test platform in 2020, which allowed banks to simulate the issuance, distribution, and exchange of CBDCs amongst banks, financial service providers, and consumers.

“Central banks are moving from research to actually wanting to have a tangible product they can experiment with,” Chuy Sheffield, Visa’s head of crypto.

If Visa is successful, it might help bridge the gap between central banks and financial institutions. Visa is accepted by over 80 million merchant locations worldwide.

In the last year and a half, the number of countries investigating CBDCs has more than doubled. According to the Atlantic Council’s CBDC tracker, at least 87 different countries — accounting for 90% of global GDP — are considering financial technology in some way.

China has already started a number of digital yuan pilot initiatives and plans to accept the currency for the Beijing Winter Olympics. Nigeria and the Bahamas have their own CBDCs in circulation.

In early December, Visa announced the formation of a worldwide crypto advisory practice to assist financial institutions in developing their cryptocurrency operations as demand for crypto goods grows.

Related article | Visa Is Building A Payment Channel Network On Ethereum

Featured image from Pixabay, chart from TradingView.com

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Stripe builds new crypto team for payments three years after dropping Bitcoin

U.S. fintech giant Stripe is hiring a new blockchain team to enable crypto payments for its users.

The $100 billion company is returning to the crypto sector three years after it pulled back from offering Bitcoin support due its slow transaction times and rising fees.

According to a job listing page on Stripe’s website, the firm is looking for four “Staff Engineers” with experience in the crypto sector. Guillaume Poncin, the head of engineering stated on Twitter earlier today that he’s looking for engineers and designers to “build the future of Web3 payments.”

The listing outlines that the future engineers and designers will be tasked with working “across everything from web/mobile UIs to backend, payments and identity systems.”

“We hear a growing need from developers and users in that space for better building blocks to accept payments, move funds, exchange between fiat and crypto, etc. By focusing on these problems and needs, we aim to build faster, more trustworthy, and higher quality crypto-enabled experiences,” the listing reads.

Stripe Co-founder John Collison chimed in on Poncin’s post by stating that “Stripe and crypto have grown up at the same time,” and said that the firm decided to take the plunge into crypto after observing “exciting” developments in the space:

“We started writing code the year after the Bitcoin paper dropped. We’ve always kept an eye on things (e.g. Bitcoin support 2013-2015) but last few years’ developments (L2s, new chains, stablecoins, DeFi) are particularly exciting.”

The move to accept crypto payments comes after major competitors includ Square, Paypal, Mastercard, and Square have all entered the crypto sector. Square launched BTC trading via its Cash App in 2018, Paypal launched crypto support for U.S. customers in October 2020, while Mastercard announced in February this year that it would support multiple crypto assets on its network.

Stripe initially started accepting Bitcoin (BTC) back in 2014, but withdrew support four years later due to its slow transaction times and rising fees. In a blog post from Jan. 23 2018, Stripe stated that it may return to the sector once crypto payments are “viable,” pointing to the development of the Lightning Network and “high-potential” projects emerging on the Ethereum blockchain.

Earlier this year in June, Collison hinted that the firm was looking at crypto again as he told Bloomberg TV that:

“If you think of the kind of world that crypto people and we are trying to bring about, I think it’s a very related set of goals.”

“We are stuck down at this level where only a fifth of interactions are cross border, crypto is one very exciting direction for trying to solve that,” he added.

Related: Meet the crypto payment gateway startup that strives to become the Stripe of Africa

The digital payments company was founded in 2011 and has a current valuation at around $100 billion. In March 2021, Stripe raised $600 million in a funding round at a valuation of $95 billion, more than doubling its previous valuation of $35 billion from 2019. According to data from Built With, there are currently 784,256 active websites using Stripe’s payments platform.