Is India planning a strategic action that could potentially threaten the global supremacy of the US dollar and disturb US President Donald Trump? The recent events indicate that New Delhi could be planning a carefully designed currency strategy that goes beyond mere statements and does not involve a direct confrontation.
In recent months, Trump has publicly warned the BRICS nations, consisting of Brazil, Russia, India, China, and South Africa, of the dangers of developing a common currency. He has even threatened to impose punitive tariffs of up to 100% in case of such an eventuality. However, while the tone has been aggressive, the Indian reaction has been very subtle.
India’s Alternative to a BRICS Currency
Rather than advocating for a BRICS currency, it seems that India is supporting an alternative that may have a greater impact. According to recent reports, the Reserve Bank of India has suggested that the digital currencies of BRICS countries should be interconnected. This would enable businesses and individuals from these countries to make transactions and settle payments in their respective digital currencies.
The genius of this proposal is in its simplicity. Cross-border payments between BRICS countries may become as easy as digital payments within a country, without the need for dollar transactions or US control over global payment systems.
Why This Plan Could Shake Washington
The fact that the US dollar is the global reserve currency gives Washington tremendous economic and political clout. Whether it’s settling international trade or commodity pricing, the dollar is at the heart of the global financial system.
If the BRICS countries start using their own digital currencies to settle trade, even if it’s just a fraction of their business, it could start to lessen the global reliance on the dollar. This is what Trump is most afraid of. A loss of dollar influence would give America less control over the global economy and less leverage to apply financial pressure on other economies.
The Strategic Play for India
The Indian strategy sidesteps the political and technological challenges of introducing a new common currency. Instead, it emphasizes the interoperability of digital currencies, making the transition more gradual and less painful. This allows India to start the process of de-dollarization without facing any immediate blowback or instability.
For India, the potential gains are enormous. It would no longer be subject to the vagaries of the dollar, transaction costs for international trade would go down, and it would gain far more control over its monetary policy.
A Slow Shift in Global Financial Power
This is not a sudden challenge to the dollar’s power. This is a slow and deliberate shift in global finance. If successful, this could set a precedent for other regional blocs to follow suit in their digital currency linkages.
What is being seen is not the sudden fall of the dollar, but the slow erosion of its monopoly. And in this, India may be playing a much bigger role than the world is letting on.
