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Brazil and China have recently announced a trade agreement aimed at further strengthening relations between the two countries. One of the novelties of this agreement is the use of CBDC (Central Bank Digital Currency) as a form of payment. In this article, we will explore the benefits of this new payment method, how it can be an alternative to SWIFT, and the technology used.
Benefits of using CBDC
CBDC is a form of digital currency issued by the central bank of a country. It is an official digital currency and represents a secure and efficient form of payment. One of the advantages of using CBDC is the speed of transactions. As the payment is made electronically, the processing time is much shorter than traditional transactions. Additionally, CBDC is a secure form of payment, as it is encrypted and verified by the central bank.
Another benefit of using CBDC is transparency in transactions. As everything is recorded electronically, it is possible to track all transactions made with CBDC. This increases transparency and trust in the financial system.
Alternative to SWIFT
SWIFT is a global financial communication network used by banks and other financial institutions to send and receive information about international payments. However, SWIFT has been criticized for being slow and expensive. Additionally, it is not a completely secure network, as data is transmitted through multiple financial institutions.
The use of CBDC as a form of payment can be an alternative to SWIFT. With CBDC, transactions are faster and more secure. Additionally, CBDC is a direct payment method, without intermediaries, which reduces costs and increases efficiency.
Technology Used
The technology behind CBDC is blockchain. Blockchain is a distributed LEDGER technology that allows transactions to be securely and transparently recorded. Each transaction is verified by a large number of computers on the network, making the network very secure and resistant to fraud.
Blockchain also allows transactions to be recorded in an immutable manner. This means that once a transaction is recorded on the blockchain, it cannot be changed or deleted. This increases transparency and trust in the financial system.
The trade agreement between Brazil and China, which uses CBDC as a form of payment, is an important development in the global financial landscape. The use of CBDC brings many benefits, such as speed, security, and transparency in transactions. Additionally, CBDC can be an alternative to SWIFT, a network that has been criticized for being slow and expensive. The technology behind CBDC, blockchain, is a secure and transparent technology that can revolutionize the global financial system. The trade agreement between Brazil and China may be just the beginning of a new era in the global financial system.
In the article, I discuss advances that will begin this year with the use of CBDC as a form of payment. Alternatives will only prove to be useful and accurate if tested and applied. Therefore, it is a new form of currency transaction aimed at economic, security, speed, and technological goals.
