Vladimir Putin Reveals BRICS Dollar Strategy Amid Donald Trump Policy Shifts

Vladimir Putin reiterates Russia will cut, not eliminate dollar usage in BRICS, as Trump’s policies are questions for de-dollarization. Russia clarified that it will not eliminate the US dollar, but rather decrease its utilization within payment transactions and others within the existing BRICS de-dollarization process. Today, BRICS is creating a single payment system for using local currency to strengthen its financial sovereignty and minimize dollar dominance. Trump returned to office, reinforcing the dollar, which goes against the de-dollarization effort of the BRICS.

Regarding Russia’s place within the BRICS association, Putin told America where she is located regarding the use of the USD. In contrast to another step of the BRICS block towards non-dollarization, Putin underlined that Russia does not intend to stop using the dollar as a currency to settle international payments but to limit its use only for this purpose. Regarding the dollar as a “structural pillar of US power,” Putin pointed out that the course towards new currencies is just a reaction to new processes.

Vladimir Putin Confirms Russia Won’t Ban Dollar

Speaking in an interview last week, Vladimir Putin emphasized that despite discourse on de-dollarization in BRICS, Russia will not stop using the US dollar entirely. Hence, Russia seeks to minimize the dollar’s position in transactions to the extent of cutting its usage into the global balance of payments. Putin noted that payments in dollars are gradually decreasing, but this process is due to the development of the tendencies that emerged in the global economy and cannot be referred to as a rejection of the currency from the United States.

At the same time, BRICS is still developing an integrated payment system to remove the predominance of the dollar. The new system sanctioned by the payment networks of each member country will therefore allow financial independence through transactions in local money. The initiative forms part of the bloc’s efforts to enhance its financial architecture.

Trump’s Policies Challenge BRICS’ Dollar Strategy

However, the re-election of Donald Trump in the USA might define the developments in the issue of de-dollarization in BRICS. During his campaign, Trump stated that he would remain committed to maintaining the dollar’s primacy in the international financial system and that any country that dared to disengage from the dollar would be met with tariffs on their exported goods. To a certain degree, this stance could present difficulties for the BRICS nations desiring to diversify away from the dollar.

Hence, during Donald Trump’s administration, attempts to consolidate the dollar might present difficulties with which the BRICS grouping will be confronted in trying to develop alternatives. Nevertheless, such threats may pose certain challenges to the further collaboration of BRICS leaders, including Vladimir Putin, in pursuit of various approaches to the problem of currency strategies.

However, revealing plans regarding future financial measures, Vladimir Putin pointed at the possible use of such assets as Bitcoin and XRP within the framework of BRICS. Putin admitted their interest in experimenting with such cryptocurrencies, although their usage is still in its infancy. 

Still, he pointed out that a complete decentralization of the economy into cryptos is untimely, and the focus is still on national currencies. Therefore, according to the president, the member countries are focusing on the establishment of an efficient banking system for facilitating interaction within the BRICS countries.

Towards Financial Independence for BRICS

Russia chosen by the leader Vladimir Putin ‘slightly’ surrendered dollar dominance in the BRICS countries but still used of dollar in transactions between countries of this bloc. As BRICS tries for the formation of a payment system aimed at using local currencies and significantly decreasing the role of the dollar, Russia understand that the dollar will continue to play a role in global payments. Putin is a very pragmatic person and his goal is to achieve financial independence but not free from the dollar.

Donald Trump winning this year’s presidency with his policy on strengthening the American dollar might pose a great threat to working against the de-dollarization agenda of the BRICS group of nations. The position of his administration on the use of tariffs against countries that seek to unseat the dollar complicates the strategies of the BRICS bloc. Nonetheless, BRICS intends to promote the financial independence of this organization, where Russia tested different modes such as Bitcoin and XRP but still are in the experimental stage.