The Digital Euro’s centralized ledger model vs. BRICS’ distributed token strategy, and what it means for cross-border B2B settlements.
0
“BRICS vs Euro CBDC race spotlights two opposite blueprints for digital money. The Digital Euro uses a single ECB‑run ledger, GDPR shields, and a soft €3,000 wallet cap; it clears retail and B2B payments in seconds via TARGET‑Instant, trimming card fees and SWIFT hops. The BRICS blockchain system runs a multilateral DLT, where each central bank mints tokens backed by local currency plus up to 40% gold, enabling peer‑to‑peer settlements and sanctions‑resistant trade.”
𝐼𝑛 𝑡ℎ𝑒 𝐵𝑅𝐼𝐶𝑆 𝑣𝑠 𝐸𝑢𝑟𝑜 𝑠ℎ𝑜𝑤𝑑𝑜𝑤𝑛, 𝑡𝑤𝑜 𝑣𝑒𝑟𝑦 𝑑𝑖𝑓𝑓𝑒𝑟𝑒𝑛𝑡 𝑐𝑒𝑛𝑡𝑟𝑎𝑙‑𝑏𝑎𝑛𝑘 𝑑𝑖𝑔𝑖𝑡𝑎𝑙‑𝑐𝑢𝑟𝑟𝑒𝑛𝑐𝑦 𝑏𝑙𝑢𝑒𝑝𝑟𝑖𝑛𝑡𝑠 𝑎𝑟𝑒 𝑟𝑎𝑐𝑖𝑛𝑔 𝑡𝑜 𝑟𝑒𝑤𝑟𝑖𝑡𝑒 𝑐𝑟𝑜𝑠𝑠‑𝑏𝑜𝑟𝑑𝑒𝑟 𝑝𝑎𝑦𝑚𝑒𝑛𝑡𝑠.
The European Central Bank (ECB) is finalising the Digital Euro rulebook while the BRICS bloc pushes a token‑based settlement layer that could bypass SWIFT. Together, they mark a decisive pivot away from dollar rails and a preview of a fractured monetary order.
It’s uniform compliance versus flexible sovereignty.
Europe prioritises privacy and deposit safety, while BRICS chases autonomy and cheaper South‑South commerce. Both threaten legacy correspondent banking, shrink FX spreads, and shift geopolitical leverage away from the dollar, necessitating firms to wire up for both systems to stay future‑proof.
The ECB frames the Digital Euro as a sovereignty project. Instant, pan‑European settlement would cut the Eurozone’s reliance on Visa, Mastercard, PayPal, and US cloud providers, reinforcing strategic autonomy.
Also Read: Trump's Crypto Agenda: Tax Havens vs. Regulatory Crackdown
According to the ECB’s third progress report (16 July 2025), 70 companies are already testing point‑of‑sale prototypes with a vote on go‑live pencilled in for October 2025.
The Kazan 2024 roadmap sketched a decentralised, permissioned network (“BRICS Pay”) where each member mints CBDC tokens, pegged to its own unit. A separate proposal pegged it to a 40% gold / 60% currency basket.
The platform’s core promises include:
Russia’s SWIFT expulsion and US tariff threats accelerate the search for alternative rails. Leaders in Rio (July 2025) reaffirmed their commitment to work on the cross-border system despite external pressure.
Also Read: 2025 Global Crypto Regulations: How Different Countries Are Approaching Cryptocurrency
To put their designs into perspective, the table below lays out the key moving parts side by side. Notice how almost every row is a trade‑off between tight central control and broader flexibility.
In layman's lingo: Think of the Digital Euro as a single‑track train run by one conductor—the ECB—on rails already laid across Europe. Because everything is paid in euros, trips are quick, capped, and closely monitored under EU privacy and anti-money-laundering rules.
The BRICS setup, by contrast, is a multi‑track network where each member drives its own train but follows shared signals. Carriages can be loaded with gold‑backed value and switch currencies mid‑journey, making the system nimble for big wholesale trades yet less focused on everyday pocket use. Euro rails promise uniform speed and safety; BRICS rails trade that certainty for autonomy and a wider geographic reach.
Traditional cross‑border payments travel on the SWIFT “MT” network. Each transfer is passed from one correspondent bank to the next, piling on foreign‑exchange spreads, compliance checks, and sometimes U‑turns for sanctions screening. Those extra hops explain why a wire from Paris to São Paulo may take two workdays to clear.
In simple terms: Average corporate wire: €25 plus (fee) FX spread. Contrarily, no dollar leg = no FX conversion = no spread.
Digital Euro rails erase correspondent layers, saving 50‑70 bps on intra‑EU invoices. BRICS Pay claims similar gains on South‑South trade by netting in local tokens and dodging dollar legs. OMFIF estimates a 1‑2% cost saving on 50% of intra‑BRICS trade if gold‑backed tokens clear multilaterally.
Also Read: Crypto exchange volumes fall for second straight quarter despite bitcoin growth
Both camps see CBDCs as soft‑power anchors: EU lawmakers cite dollar weaponisation, BRICS leaders cite sanctions evasion. Whichever system wins, users will shape norms for programmable money, AML optics, and reserve‑currency share.
Also Read: Western Union explores stablecoin integration in digital wallets
Central‑bank digital currencies are no longer experiments; they are instruments of geopolitical leverage.
For multinationals, the message is clear: Prepare connectivity to both rails, because only diversified settlement options can hedge tariff shocks and de‑dollarisation risk.
A BRICS currency would reduce the need for the dollar in trade and reserves, thereby weakening U.S. sanctions leverage. However, the share of the dollar in international transactions can fall only if the new currency standard is stable and widely accepted. Analysts warn that de-dollarisation would be gradual and adoption-driven, rather than automatic.
Current plans propose a BRICS token backed 40% by gold and 60% by member currencies. The bullion will be held inside each country’s vaults. BRICS states already control approximately one-fifth of global official gold, providing them with collateral for such a design; however, final rules are still under discussion.
The Digital Euro is a public payment tool, not an investment asset. It is issued by the ECB and is usable both online and offline. It is capped at €3,000 per person to protect bank deposits. It aims to keep payments within Europe, strengthen resilience, and offer cash-like privacy while complying with EU AML and GDPR regulations.
There is no single “best” method. The choice of payment method depends on context. According to Reuters, cash still accounts for 52% of in-store transactions, while cards cover 39%, and mobile wallets have doubled to 6%. For online purchases, digital wallets and cards are the preferred payment methods because they are instant, refundable, and widely accepted across the Single Euro Payments Area (SEPA).
Each payment mode serves a different goal: BRICS seeks sovereignty, stablecoins offer speed, and the Digital Euro secures public money in a digital age.
0
