The BRICS countries plan to launch a digital asset platform for internal cross-border settlements, a move that appears to anger U.S. President-elect Donald Trump. Over the weekend, Trump warned that the BRICS countries, including India, would raise tariffs by 100% if they continue to work to reduce the dollar’s role in the global economy. The BRICS countries were originally composed of Brazil, Russia, India, China and South Africa, and now also include Iran, Egypt, Ethiopia and the UAE.
President Trump said that if the BRICS countries take plans to reduce their dependence on the dollar, they will lose the opportunity to sell any product to the United States. In a tweet posted on December 1, Trump said: “The BRICS countries are trying to move away from the dollar as we stand, and the observation is over. We need the promise of these countries that they neither do Will create new BRICS currencies, and will not replace any other currencies with a powerful dollar, or they will face 100% tariffs, and should expect to say goodbye to sell to a good U.S. economy. Transparent
The idea of the BRICS countries trying to stay away from the dollar as we stand and watch is over. We need the commitment of these countries that they will neither create new BRICS currencies nor replace any other currencies with a powerful dollar, or they…
— Donald J. Trump (@RealDonaldTrump) November 30, 2024
It is worth noting that this warning from the U.S. president just days after the Russian House of Lords parliament approved a bill, outlining the tax framework for cryptocurrency assets, marking a step to legalizing the country’s cryptocurrency. To maintain a greasy crypto ecosystem within its territory, Russia also plans to exempt cryptocurrency miners from paying value-added tax (VAT) to mined cryptocurrencies. Russian President Vladimir Putin has not signed the bill yet.
That being said, Putin, along with Indian Prime Minister Narendra Modi and Chinese Xi Jinping, have not yet responded to President Trump’s warnings.
Details about the BRICS plan to use digital currency plans
Following Covid, the U.S. Federal Reserve has implemented continuous interest rate increases to stabilize its struggling economy, which has negatively impacted smaller economies relying on the dollar.
For countries such as China and Russia, efforts to reduce their dependence on the US dollar have become stronger and stronger after the United States imposed multiple sanctions on its citizens. In China’s case, concerns about technology-related national security are a major factor, and the ongoing war between Russia and Ukraine has led not only to the United States, but also to sanctions on other countries.
Since March 2024, the BRICS countries have begun planning digital payment networks supported by digital currencies. The platform, tentatively known as BRICS wages, is expected to promote cross-border settlements in the above countries through digital assets such as encryption and CBDC.
The BRICS countries also plan to launch this internal payment system with secure messaging platforms like Swift System, which international banks are currently using to facilitate internal communications. The platform’s release schedule remains uncertain.
