Author: Mohamed Allam, Research Analyst; Translated by: 0xjs@黄金财经
This week is the BRICS Summit, where an important global alliance is expected to be formed. 35 countries have confirmed their attendance, and the BRICS will be renamed BRICS+ to reflect its growing number of members.
Egypt, Ethiopia, Iran, Saudi Arabia and the United Arab Emirates (UAE) will join BRICS+. Although this expansion will be gradual, the summit is expected to provide more insights into the potential development of a new global order.
In this article I want to highlight the importance of MBridge, a topic I have discussed before, specifically with regard to recent developments in the UAE:
MBridge Refresher: MBridge, also known as the Multi-CBDC Bridge, is a multi-CBDC platform designed to support real-time, peer-to-peer cross-border payments and foreign exchange transactions using CBDCs. Built on the MBridge Ledger blockchain, the platform ensures compliance with the policies, legal requirements, regulations, and governance needs of specific jurisdictions.
UAE Adoption of CBDC: The UAE recently launched its own CBDC with the approval of the central bank, marking a significant shift towards blockchain-based infrastructure. This highlights the focus of countries on leveraging blockchain technology rather than just the concept of “cryptocurrency”. The term “currency” is often misleading, as blockchain infrastructure and the ease of its use is the real goal.
Ongoing MBridge Testing: As part of the ongoing testing of the network, several transactions have been completed on MBridge, including a transfer of AED 50 million from the UAE to China. These tests are designed to explore the capabilities of the system, but it is important to note that it is still in the experimental stage. These are steps to understand how the network works at scale.
Future Challenges: Despite the progress, MBridge still faces significant challenges, especially in terms of liquidity and foreign exchange transfer rates. One possible solution could be to create a unified currency using the CBDCs of a basket of BRICS member countries, but as the network develops, this idea remains speculative.
BRICS and the Transformation of Global Finance: As the BRICS countries position themselves to reshape the global financial landscape, the possibility of a decoupling from the US dollar is becoming increasingly apparent. Former US President Donald Trump recently stated that any country that decouples from the US dollar could face a 100% tariff on goods entering the United States, indicating a growing awareness of changes in global finance.
That being said, it is just a waiting game. The BRICS are coming and the landscape is changing. The BRICS are positioning themselves to potentially create a new global order and the West may not be fully aware of a lot going on behind the scenes.
As I discussed in Death by a Thousand Cuts, all of these little factors could eventually lead to a gradual move away from the US dollar.
The next few years will be huge for the world, but for us in crypto, we are very used to change.
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