By Lehlohonolo Lehana.
U.S. President-elect Donald Trump on Saturday, has demanded BRICS member countries commit to not creating a new currency or supporting another currency that would replace the dollar or face 100% tariffs.
The BRICS nations — as Brazil, Russia, India, China and South Africa are collectively known — discussed the issue of de-dollarization at a summit in 2023.
In 2024, Iran, Saudi Arabia, the United Arab Emirates, Ethiopia, and Egypt formally joined. It was the first expansion in over a decade.
The BRICS countries account for 45% of the world’s population, 34% of the earth’s area, and 37% of global GDP at PPP.
Two years ago, Russian President Vladimir Putin announced that the BRICS nations were developing a new reserve currency backed by hard assets such as gold or oil.
Since then, there have been many discussions around creating a new gold-backed currency, known as the “Unit,” as an alternative to the US dollar.
At the latest BRICS summit, Putin appeared to display a prototype of a possible BRICS banknote while on stage.
This weekend, Trump warned BRICS nations like South Africa, which are trying to move away from the US Dollar, that it will not be without consequences.
“The idea that the BRICS Countries are trying to move away from the Dollar while we stand by and watch is over,” Trump said.
“We require a commitment from these countries that they will neither create a new BRICS currency nor back any other currency to replace the mighty US Dollar.”
He warned these nations that they would face 100% tariffs and should expect to say goodbye to selling “into the wonderful United States economy”.
“They can go find another sucker! There is no chance that the BRICS will replace the US Dollar in International Trade, and any country that tries should wave goodbye to America,” he said.
In October 2024, A new digital payments system, BRICS Pay, debuted live at the BRICS Business Forum.
Forum attendees could access the BRICS Pay platform in a limited capacity to test out payments for purchases at stores labelled with the BRICS Pay logo.
BRICS Business Forum attendees were issued demo cards preloaded with 500 Rubles, which they could use at various locations within the World Trade Center.
The main method of payment trialled is through QR codes, which aim to connect national payment methods with commercial payment systems in BRICS+ countries.
The system operates on blockchain technology and supports digital currencies or stable coins pegged to the national currencies of member states.
The system’s ultimate vision is cross-border retail support across the BRICS+ bloc. Future plans are to examine business-to-business payments and then develop the BRICS+ UNIT.