A historical turning point has just occurred ... and it is not the Trump assassination attempt

globinfo freexchange

 

The biggest crime of our century, that is, the genocide of Palestinians by the Zionists has been almost forgotten. And while everyone is distracted by the war in Ukraine and the assassination attempt against Donald Trump, a development of historic proportions took place. The development either escaped from the corporate media radars in the West, or, deliberately ignored.

 

The integration of Russia's and India's payment systems marks the definite rejection of the Western SWIFT system, dominated by the US dollar, and the complete detachment of BRICS from this system.

 

As Kitco News reported recently:

 

The trend of de-dollarization continues to gain traction despite many analysts saying the threat is overblown as India and Russia have announced a new partnership that will see their respective payment systems – India’s RuPay and Russia’s MIR – integrated to allow for seamless cross-border transactions without the need for U.S. dollars. 

The partnership announcement follows the recent visit by India’s Prime Minister Narendra Modi to Moscow, during which the two countries forged new alliances and trade agreements. At the meeting, India confirmed its commitment to open trade with Russia, a key BRICS counterpart, and will facilitate trade using the RuPay and MIR payment systems. 

As part of their agreement, Russian President Vladimir Putin and Modi reportedly set a goal to achieve $100 billion in trade turnover between Russia and India by 2030. 

Using homegrown payment systems and their local currencies is expected to benefit the countries as it will allow them to save millions in exchange rates and move away from the USD, helping to strengthen their local currencies and economies. 

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While many analysts assert that the threat of de-dollarization is overblown, it’s undeniable that the USD could see its use in transactions significantly diminished if BRICS countries begin increasing their use of local and national payment systems for trade. 

The U.S. banking and financial sectors could be the hardest hit by BRICS moving away from the dollar. It could also lead to a shakeup in forex markets as new currency pairs rise amid the transition, further weakening the USD. 

With U.S. banks lending millions of dollars globally, any move away from the dollar could see these activities reduced, hurting the banks’ bottom line at a time when they are already struggling to find meaningful avenues for growth and revenue.

 

The development is of particular importance, considering that many imperialist hawks in Washington were viewing India as the most closer-to-West weakest link inside BRICS, and thus, it could be used to undermine its unity.

 

And it could be considered a decisive moment for the successful completion of the ongoing de-dollarization process by the BRICS and an increasing number of countries of the Global South. 

As FXStreet predicted already since last April:

 

With Russia taking the lead, the BRICS bloc is talking about creating a new payment system that isn’t controlled by the United States and that is not dependent on the dollar.

Such a system could accelerate de-dollarization.

BRICS is an economic cooperation bloc originally made up of Brazil, Russia, India, China, and South Africa. As of Jan. 1, 2024, the bloc expanded to include Saudi Arabia, Egypt, the UAE, Iran, and Ethiopia.

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Currently, most global trade moves through the Society for Worldwide Interbank Financial Telecommunication (SWIFT) system.  

In effect, SWIFT serves as a "superhighway" facilitating global trade. It operates as a global financial messaging service, facilitating cross-border payments. As the SWIFT website puts it, “SWIFT is the way the world moves value.”

Since the dollar serves as the world reserve currency, SWIFT effectively facilitates the international dollar system.

It also gives the United States a powerful tool to shape foreign policy. It can use SWIFT as a hammer, punishing countries that don't do its bidding by locking them out of the system.

 

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Russia has created its own payment system to compete with SWIFT. The Russians began developing the System for Transmitting Financial Messages (SPFS) in 2014 after the U.S. locked Russian banks out of SWIFT for the first time. By the end of 2020, 23 foreign banks connected to the SPFS. Most of these banks are in developing countries and nations with rocky relationships with the U.S., but they include banks in Germany and Switzerland. According to Nabiullina, the SPFS currently has 159 foreign participants in 20 countries.

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China has developed a system known as the Cross-Border Interbank Payments System (CIPS). Russia would like to see these systems integrated across the BRICS bloc, creating a powerful alternative to SWIFT.

 

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Would an alternative payment system be a problem for the U.S.?

The short answer is yes.

Why?

Because it would pose a direct threat to dollar dominance.

Beyond eroding America’s foreign policy influence, a widely used BRICS payment system could also accelerate de-dollarization.

In fact, during last year’s summit, BRICS leaders emphasized conducting increased trade within the bloc using local currencies as part of a move towards de-dollarization, with a stated goal of reducing the U.S. dollar’s dominance in global trade and finance.

This isn’t just a slap in America’s face. It could have significant economic ramifications.

Because the global financial system runs on dollars, the world needs a lot of them. The United States depends on this global demand to underpin its profligate borrowing and spending. De-dollarization could lead to a dollar glut.

 

What is left now to see, is how the US declining empire will respond to such a historically important event under a Trump presidency.