The United States, which still thinks it is all-powerful, must watch Brazil, the largest Latin American economy, break free of its shackles and bypass the dollar wherever possible.
China authorized the Brazilian subsidiary of the ICBC (Industrial and Commercial Bank of China) to clear the yuan into real directly.
Establishing an intermediary bank, a “cleaning house, ” is necessary to carry out trade and financial operations directly between two currencies.
This way, the US dollar in the transactions will not be required.
The central banks of the two countries had established, on January 31st, a memorandum to make the conversion possible.
On Wednesday (29), during a business event in Beijing, the capital of China, the Secretary of International Affairs of the Ministry of Finance, Tatiana Rosito, said that the Chinese government had determined that an institution responsible for the operation would be established.
“This ‘cleaning house’ is an initial step” for implementing the measure, the secretary explained. According to Rosito, despite the authorization, there is a lack of primary resources from these institutions and a lack of business knowledge about these operations.
ICBC is the largest bank in the world by total assets, according to consulting firm S&P Global.
The bank is controlled by the Chinese government and was founded in 1984. Its Brazilian subsidiary was opened in 2013.
The Chinese government has been pursuing the internationalization of its currency since 2009 as a response to the global financial crisis. In 2013, the yuan became the 2nd most used currency in the world, behind only the US dollar.
China has signed at least 41 memorandums similar to Brazil’s. Among them, with other Latin American countries, such as Chile and Argentina.
BOCOM BBM BANKS JOINS THE CINESE SWIFT
Bocom BBM bank has announced joining the Chinese interbank payment system, CIPS (China Interbank Payment System).
The system is analogous to Swift, which allows international transactions.
According to information from the Brazilian embassy in China, the bank will be the first participant in this system in South America.
Bocom BBM has been controlled by the Chinese since 2015. That year, the Bank of Communications (Bocom) came to control the Brazilian Banco BBM, the former Banco da Bahia.