Trump effect? This is how the BRICS de-dollarization plan falls apart

There are still two months until Donad Trump’s inauguration as the new president of the United States and the global geopolitical reconfiguration has begun to have its first effects.

And as soon as it became known that the Republican had swept the election results on November 5, a series of announcements began to disconcert the public, especially those who followed with interest the global de-dollarization plans that the bloc was implementing. the BRICS, led by Russia and China.

The first information came from Russian President Vladimir Putin, announcing that he had no plans to abandon the dollar. A 180 degree turn in his speech, which since last year insisted on increasing levels of dollar-free international marketing of his country.

«We are not looking to abandon the dollar. This is done by the political and financial authorities of the United States or Europe when they refuse to pay in euros,” Putin said. He added that, although Russia has not rejected the use of the greenback, “they have prohibited us from using the dollar as a means of payment.”

Just a week earlier, the BRICS had concluded their annual summit. An event where it was expected that important advances would be shown in the development of a new payment system without dollars. It would become the spearhead to compete with Western platforms that are based on the US currency.

During the Summit, Putin insisted on the need to create an exclusive economic platform for the BRICS countries. The participants reiterated the conversations on the construction of multilateral financial mechanisms; although no emphasis was placed on the new payment system, beyond making a demonstration with the BRICS Pay platform.

The strongest changes came later. As soon as Donald Trump’s return to the White House was known, the BRICS they decide to abandon the single currency project that was proposed last year. A decision that constitutes a notable setback in its search for monetary sovereignty and in its willingness to challenge American domination.

Trump wins and the BRICS abandon their single currency

Through a statement published on November 6, the Kremlin spokesman, Dmitri Peskov, made official that the idea of ​​a single currency for the BRICS bloc had been put aside. He estimates that “it is not possible” at this stage to achieve such an ambition.

In his words, currently it is much more interesting for the BRICS talk about new instruments or joint platforms to make investments from countries with a higher level of development to countries with a lower level of development. “The creation and development of possibilities for the creation of such platforms in the near future is very important,” said the official.

This is a drastic change in the discourse, which until recently was characterized by promoting de-dollarization. Spokespeople for the regional bloc constantly cited the rise of trade in local currencies, the creation of new payment tools in which central bank digital currencies (CDDC) and even cryptocurrencies were involved.

The reports on the regulation of mining and the creation of a cryptocurrency platform in Russia They seemed to point to an “imminent de-dollarization.” As CriptoNoticias reported, several payment tools were shown as the prelude to “a new financial system.”

One of those tools is the Financial Transfer Message System (SPFS) created by the Central Bank of Russia. There was also talk of BRICS Pay and a stablecoin: the Common Account Unit (Unit), which would be backed by gold. They were joined by BRICS Bridge, which would function very similar to mBridge, the CBDC-based cross-border digital currency project coordinated by the BIS. The organization even threatened to close the project given the interest of the BRICS.

From there the surprise caused by the group’s new statements. Something that most analysts observe as a kind of “abortion of the de-dollarization plan.”

BRICS splits

The news of the change in plan was known after the United States elections, but weeks before there were already signs of a lack of homogeneity in the group. Last October the Indian government said that will not stop using the US dollar, moving away from the stance against the dollar.

According to statements by Indian Foreign Minister Subrahmanyam Jaishankar, the country is not interested in dedollarizationand therefore they will continue to use the US dollar “wherever it is accepted as a form of payment.” He assured, therefore, that attacking the dollar was not part of his economic policy.

The words of the Indian government and Putin’s statement are understood as the waving of a white flag before the United States, especially after Donald Trump (in the middle of the election campaign) would threaten with charge 100% tariffs to countries that abandon the dollar.

What the now president-elect has in mind is to impose export controls, charges for currency manipulation and tariffs for any country that opts for a currency other than the dollar for bilateral trade. A plan that is expected to be implemented once he assumes the presidency, as a way to fulfill his promise of maintain the global hegemony of the dollar.

The divergence of opinions among the BRICS countries it became evident after the Republican victory. India and Russia retract and show willingness to use the dollar, although Brazil wants to continue with dedollarization.

The president of the Brazilian analytical agency CMA, José Juan Saches, assured that the BRICS has no intention of changing its direction after Trump takes power in January 2025.

These differences were made evident in the Russian spokesperson’s statement.

All countries understand that the world’s reserve currency, the US dollar, can be used as a political tool against them, or that the “SWIFT payment system can be used as a tool in attempts to suppress one of the world’s states.” . But not all countries are yet willing to cooperate in establishing an alternative payment system.

Dmitri Peskov, press secretary of Vladimir Putin.

Thus, hopes that the BRICS will make progress in challenging the dominance of the dollar in a unified manner crumble. Possibly because some members of the bloc They seek to avoid any open confrontation with the United States in the monetary field.

Trump brings a reunion with the dollar

This is how the new president, although he has not taken office, seems to already be fulfilling his commitment to rescue the dollar. Recent reports observe that the Republican’s victory has influenced the rebound in the US currency.

According to data from the firm SimpleVisor, the use of the dollar has surpassed that of the euro and the yuan in global SWIFT transactions, reaching its highest level in the last 12 years. A trend that analysts They describe it as “redollarization”«.

“The reality, as the graph (below) shows, is that redollarization is the current trend,” the report says. “Some people believe that the Chinese yuan could be a viable substitute at some point. Although its participation has increased, it only represents 5% of global payments,” they add.

As this media has pointed out, everything indicates that the status of the dollar as a reserve currency still robustand obviously Donald Trump is playing a role in it.

However, the debate about its future and the possibility of a change in the global monetary balance continues, which invites us to continue closely observing the economic and political dynamics that could influence this scenario.