Ebury, a fintech specializing in cross-border payments and FX solutions, based in London and present in 25 countries, has introduced to the market a pioneering solution for direct transactions between the Brazilian real and the Chinese yuan.
The new solution will facilitate and expedite trade between Brazil and China, which in 2023 alone totaled exports and imports of over US$145 billion, according to Brazilian Government data. The solution benefits companies in both the traditional industrial and digital technology sectors.
Transactions between Brazil and China are complex and could involve multiple intermediaries due to the difference between the Chinese currencies and their liquidity in the global market. Due to the yuan’s low liquidity in the global market, most transactions involve intermediary currencies such as the dollar, euro and pound.
The Ebury solution eliminates this complexity, enabling companies to carry out transactions directly between the currencies. This is already a reality for FX transactions via dealers, which conduct transactions involving BRL and yuan for companies engaged in foreign trade. Besides facilitating transactions, Ebury also provides access to a global account that enables payments to be made in various countries as a local entity, using various currencies and not just the Chinese yuan. By eliminating the need for intermediary currencies, transaction costs and times are reduced since only one currency conversion occurs.
In addition to import and export transactions, the solution also benefits international digital businesses operating in Brazil, such as Chinese marketplaces, gaming companies, SaaS, among other digital segments.
“It’s great to witness this evolution in international transactions, which makes cross-border trade more dynamic and swifter. In recent months, we ran a successful pilot project with a PSP in charge of the payment processes of several Chinese digital merchants, and we have seen optimized margins on transactions, with a faster and frictionless process - factors that further spur the operations of Chinese merchants in Brazil”, said Luiz Henrique Didier, CEO of Ebury in Brazil.
This innovative solution from Ebury is aligned with the impressive growth in cross-border trade between Brazil and China, which increased 150% in the last five years, according to Brazil’s Federal Revenue Service.
In 2023 alone, Brazil’s exports to its main trading partner - China - exceeded US$95 billion, while imports came to a little over US$49 billion, according to Brazil’s trade balance data. Since 2009, China has been Brazil’s main trade partner. With direct transactions between the real and yuan, companies now have a more efficient and cost-effective alternative to expand their international business, which should continue the upward trend in both directions.