BRICS State Banks Form Blockchain Implementation Consortium

by Bamidele Ogunberu Posted on July 27th, 2018

Johannesburg, South Africa: A consortium of five major state owned development banks from the five member countries of BRICS – Brazil, Russia, India, China and South Africa – agreed at its 10th annual summit to conduct collaborative research on blockchain’s distributed ledger technology (DLT) to work towards developing the digital economy.

The state development banks of Brazil, Russia, India, China and South Africa signed a memorandum of understanding, which aims to see if and how distributed ledger technology (DLT) can help them in the new digital era, the so-called 4th Industrial Revolution, Russia’s Vnesheconombank (VEB) revealed in a statement.

The banks involved are Russia’s State Corporation Vnesheconombank, Brazil’s Banco Nacional de Desenvolvimento Econômico e Social-BNDES, India’s Export-Import Bank of India (Exim Bank), China’s China Development Bank (CDB), and South Africa’s Development Bank of Southern Africa Ltd. (DBSA).

“Vnesheconombank works with the development banks of BRICS countries in a range of key areas, including financial cooperation, developing credit financing in national currencies and implementation of innovations. This joint work opens new opportunities for Russian exporters, operators of large industrial projects, recipients of investments. The current agreement allows the development banks of BRICS countries to study the applications of innovative technologies in infrastructure finance and bank products optimization,” said Mikhail Poluboyarinov, First Deputy Chairman – Member of the Board of Vnesheconombank.

“Collaboration for inclusive growth and shared prosperity in the 4th industrial revolution is key theme of the BRICS summit in Johannesburg. BRICS Interbank Cooperation Mechanism was created in 2010 as a result of cooperation agreement among state export and financial development institutions of the BRICS countries. The creation of the mechanism was initiated by Vnesheconombank and China Development Bank. Member banks of the Interbank Cooperation Mechanism made a significant contribution in the creation of the New Development Bank. In 2020, Vnesheconombank will chair the two organizations: BRICS Interbank Cooperation Mechanism and Interbank Association of the Shanghai Cooperation Organization. The summit will take place in Chelyabinsk.” the statement said.

Blockchain, developed as a DLT, has broadened its implementations in various industries outside the crypto world. Built as a DLT, it has the capabilities to faster transactions, to cut the time for making a deal by automatically generated smart contracts, and to bring transparency as it tracks all activities.

The development banks are already collaborating in a range of key areas, including financial cooperation, developing credit financing in national currencies, and implementation of innovations.

State-owned development banks are generally entrusted with the task of supporting the economic development of the respective countries. BRICS Interbank Cooperation Mechanism was initiated in 2010 by Vnesheconombank and China Development Bank.

The current agreement allows the five development banks to study the applications of innovative technologies in infrastructure finance and bank products optimization.

Russia President Vladimir Putin’s Statement at the BRICS Summit also pointed to a new financial and monetary architecture coming into being with multilateral development banks funds.

The tenth annual BRICS summit is attended by the heads of state or heads of government of the five member states – Brazil, Russia, India, China and South Africa – at the Sandton Convention Centre in Johannesburg, South Africa

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Bamidele Ogunberu

Bamidele Ogunberu

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