The Union Cabinet of India, chaired by Prime Minister Modi, has given its approval for a Memorandum of Understanding (MoU) on collaborative blockchain research between the BRICS’ (Brazil, Russia, India, China, South Africa) participating member banks.
These banks include the Export-Import Bank of India (Exim Bank), Banco Nacional de DesenvolvimentoEconomico e Social (BNDES, of Brazil), China Development Bank (CDB), State Corporation Bank for Development and Foreign Economic Affairs (Vnesheconombank, of Russia) and Development Bank of Southern Africa (DBSA).
The MoU aims to increase the understanding of blockchain/DLT and identify areas where its use could be most effective.
Speculation on the new technology’s potential was light in the official document, but it did give particular mention to “enhance[ing] operational efficiencies”.
This announcement comes on the heels of The Xiamen Declaration, signed by BRICS leaders, which highlighted the importance of the digital economy and how signatories could leverage digitization for global growth.
While not explicitly mentioned in the announcement, the most likely focus area is trade finance. There are already numerous blockchain trade finance initiatives. Apart from the four big private trade finance consortia, both Hong Kong and Singapore have trade finance initiatives and plan to coordinate them. The BRICS project is at a far earlier stage. But given blockchain is intended to break down silos, one can only hope the different projects speak to each other to enable interoperability.