A bank in Brazil has made history by becoming the first in Latin America to adopt China's Cross-Border Interbank Payment System (CIPS) for trade between the two countries.
The move came as Brazil seeks to strengthen its ties with other BRICS nations as the rotating chair of the bloc this year.
The CIPS network has now reached over 1,300 financial institutions across 110 countries.
BOCOM-BBM is Brazil's oldest bank founded in 1858. It is now fully owned by China's Bank of Communications.
At the bank, an economic shift with global implications is underway.
In 2023, the bank joined CIPS, a dollar-less exchange alternative to the global giant SWIFT.
According to the latest BOCOM-BBM data, direct trade using local currencies increased 20-fold between 2022 and 2024.
BBM's Chief Economist Cecilia Machado says that is because using CIPS reduces costs and greatly simplifies direct China-Brazil trade.
"The CNY, the Chinese currency, which was in ninth position in terms of currency settlements here in Brazil has jumped to the fourth position in currency settlements. So, this shows that joining CIPS has been facilitating an ongoing trend of financial integration between the two countries," she said.
U.S. President Donald Trump has repeatedly threatened to slap 100 percent tariffs on BRICS nations if they move to replace the U.S. dollar as a reserve currency.
And while his executive power to impose such tariffs is being challenged on a number of legal fronts, Trump's threats seem to be having the effect of accelerating BRICS efforts to find alternative currency exchange mechanisms.
Ana Garcia, a senior researcher at the BRICS Policy Center, says Brazil is being pragmatic, focusing on easing trade barriers, not necessarily replacing the dollar, since most of the country's currency reserves are in dollars.
"Trade facilitation is on the agenda. Every business wants that and now every country wants that because of Trump's tariffs is more important than ever. So, Brazil has put an emphasis on trade facilitation. And this can be tariffs. It can be transparency. It can be everything that is technical work, practical around trade. And it can be the use of local currencies to finance trade," she said.
China is already Brazil's biggest trading partner, making these financial arrangements particularly significant as July's BRICS Leaders' Summit approaches with promises to explore further mechanisms for greater economic autonomy.
Brazilian bank adopts China-led CIPS transfer system
Brazilian bank adopts China-led CIPS transfer system
Brazilian bank adopts China-led CIPS transfer system
