The BRICS nations are planning to launch a digital property platform for inner cross-border settlements, a transfer that appears to have angered the US President-elect Donald Trump. Over the weekend, Trump warned BRICS international locations, together with India, to organize for a 100 p.c improve in tariff charges in the event that they proceed efforts to scale back the US greenback’s function within the world economic system. The BRICS group, initially consisting of Brazil, Russia, India, China, and South Africa, now additionally consists of Iran, Egypt, Ethiopia, and the UAE.
President Trump said that if the BRICS nations go ahead with their plans to scale back reliance on the US greenback, they may lose alternatives to promote any of their choices to the US. In a tweet posted on December 1, Trump mentioned, “The concept that the BRICS Nations are attempting to maneuver away from the Greenback whereas we stand by, and watch is OVER. We require a dedication from these Nations that they may neither create a brand new BRICS Foreign money, nor again another Foreign money to exchange the mighty U.S. Greenback or, they may face 100 p.c tariffs and will count on to say goodbye to promoting into the fantastic US Financial system.”
The concept that the BRICS Nations are attempting to maneuver away from the Greenback whereas we stand by and watch is OVER. We require a dedication from these Nations that they may neither create a brand new BRICS Foreign money, nor again another Foreign money to exchange the mighty U.S. Greenback or, they…
— Donald J. Trump (@realDonaldTrump) November 30, 2024
It’s noteworthy that this warning from the US President comes simply days after Russia’s Higher Home of Parliament authorised a invoice outlining the taxation framework for crypto property – marking a step in direction of legalising cryptocurrencies within the nation. As a way to maintain a well-oiled crypto ecosystem inside its territories, Russia additionally plans to exempt crypto miners from paying value-added tax (VAT) on mined cryptocurrencies. Russian President Vladimir Putin is but to signal this invoice right into a legislation.
That being mentioned, Putin alongside Indian Prime Minister Narendra Modi, and China’s Xi Jinping haven’t reacted to President Trump’s warning as of now.
Particulars on BRICS’ Plan with Digital Currencies
After COVID, the US Federal Reserve carried out consecutive rate of interest hikes to stabilise its struggling economic system, which negatively impacted smaller economies depending on the US greenback.
For international locations like China and Russia, the push to scale back reliance on the US greenback grew stronger after the US imposed a number of sanctions on their nationals. In China’s case, considerations over nationwide safety associated to tech had been a significant component, whereas Russia’s ongoing warfare with Ukraine led to sanctions not solely from the US but additionally from different nations.
Since March 2024, the BRICS began to plan a digital fee community, backed by digital currencies. Tentatively known as BRICS Pay, the platform is anticipated to facilitate cross-border settlements for the above-mentioned nations by way of digital property like crypto and CBDCs.
The BRICS nations are additionally planning to launch this inner fee system alongside a safe messaging platform very similar to the SWIFT system – that’s utilized by worldwide banks presently to facilitate inner communications. The discharge timeline for this platform stays unsure.
