One of the biggest storylines to develop this year has been the ongoing turmoil between the West and the global south. Since his arrival, US President Donald Trump has targeted the group in an effort to end its de-dollarization plans. However, those may be set to take a step forward as the BRICS are lining up a new cross-border payment system that could counter the US dollar.
The bloc has continued to stand by its hopes of diversifying global finance. Although it has not targeted the greenback directly, its moves have sought to lessen reliance on the currency as a global reserve asset. Now, their latest plan may be forwarding that effort, and Trump’s interpretation could have massive ramifications.
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BRICS to Launch Cross-Border Payment System: How Will Trump Respond?
At the start of the year, US President Donald Trump threatened BRICS nations with 150% tariffs. Specifically, the move was seeking to counter its promotion of local currencies. This was primarily driven by that promotion, resulting in a lessening of the US dollar’s status.
Although the bloc has capitulated since the warning was issued, things may be changing. Indeed, the BRICS bloc may be nearing a green light for a cross-border payment system that could affect US dollar reliance. Now, all eyes are on what that could mean for the greenback and how Trump will respond.
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According to a recent report, Russian Finance Minister Anton Siluanov discussed the development of the payment system on Friday. “At the BRICS platform, we are considering our various financial innovations,” he said. Moreover, he added that this includes “a cross-border payment system, which can be based, in addition to bilateral settlements, on national currencies, taking into account digital technologies and digital financial assets.”
That highlights the system to be critically focused on alternative currencies to the US dollar. Moreover, that pursuit is nothing new to the BRICS members. It has long been subjected to harsh Western sanctions and has since sought to settle trades in alternative currencies. With the rising prominence of crypto, that could also be used in this new payment platform.
It will likely do what similar BRICS projects have done in the past: provide a key area of exploration for developing nations and align countries. It will threaten the US dollar, but not by much. The currency won’t be dethroned as the top global reserve asset. However, the question is now if President Trump will see it that way.
