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Trump’s tariff escalation exposes ‘deeper fractures’ in global financial system

Escalating trade tensions and renewed uncertainty in global markets are driving investors toward alternative assets, including Bitcoin and tokenized real-world assets (RWAs), as concerns mount over the long-term stability of the financial system.

Global trade tensions continue pressuring investor sentiment despite US President Donald Trump announcing a 90-day pause on higher reciprocal tariffs on April 9, reverting the tariffs to the 10% baseline for most countries.

At the same time, Trump escalated his tariffs on Chinese goods from 104% to 125%, the Financial Times reported on April 9.

“President Trump’s tariff escalation marks a significant inflection point for global markets,” a move that signals “more than a trade disagreement,” said Teddy Pornprinya, co-founder of Plume — a layer-1 blockchain focused on tokenized real-world assets. He added:

“It exposes deeper fractures in the global monetary system.”

With both the US and China facing what he described as unsustainable debt levels, Pornprinya warned of increased reliance on inflationary tools, including the potential depreciation of the Chinese yuan.

“These dynamics will test the resilience of every asset class” and inspire greater adoption for tokenized credit and private yield products that “aren’t exposed to sovereign devaluation games,” he said.

Related: Bitcoin ETFs lose $326M amid ‘evolving’ dynamic with TradFi markets

The tariff fears led tokenized gold trading volume to surge to a two-year high this week, topping $1 billion for the first time since the US banking crisis in 2023, Cointelegraph reported on April 10.

Trump’s tariff escalation exposes ‘deeper fractures’ in global financial system

Top tokenized gold assets, trading volume. Source: CoinGecko, Cex.io

Onchain real-world assets (RWAs) also surpassed the $20-billion all-time high on April 9, with tokenized private credit representing the lion’s share, or $12.7 billion of total RWA value, according to data from RWA.xyz.

Trump’s tariff escalation exposes ‘deeper fractures’ in global financial system

RWA global market dashboard. Source: RWA.xyz

Some industry watchers said that Bitcoin’s lack of upside momentum may drive RWAs to a $50-billion all-time high before the end of 2025, as their increased liquidity will help RWAs attract a significant share of the $450-trillion global asset market.

Related: Bitcoin’s safe-haven appeal grows during trade war uncertainty

Tariffs are “US bargaining tool,” not lasting policy shift

Despite investor concerns, analysts at crypto exchange Bitfinex said the tariff hike may not represent a long-term policy shift.

“We believe, however, that the threat of tariffs by the current US administration is a negotiating tool to be used to persuade other countries to lower tariffs on American manufactured goods and services and are unlikely to become permanent policy,” they told Cointelegraph.

Trump’s tariff escalation exposes ‘deeper fractures’ in global financial system

Source: Raoul Pal

Raoul Pal, founder and CEO of Global Macro Investor, also said that the tariff negotiations may only be “posturing” for the US to reach an agreement with China.

The tone of the negotiations may dictate the recovery of global risk assets, including the crypto market, which has a 70% chance to bottom by June 2025 before recovering, Nansen analysts predicted.

Magazine: Bitcoin ATH sooner than expected? XRP may drop 40%, and more: Hodler’s Digest, March 23–29

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Trump’s crypto agenda is rigged for the rich

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Trump’s crypto agenda is rigged for the rich

Trump’s crypto agenda is rigged for the rich

Donald Trump’s crypto agenda claims to champion financial freedom, but in reality, it consolidates power among political elites and wealthy investors, sidelining everyday users.

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Zebec buys compliance firm Gatenox ahead of MiCA, FCA regulatory push

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Zebec buys compliance firm Gatenox ahead of MiCA, FCA regulatory push

Zebec buys compliance firm Gatenox ahead of MiCA, FCA regulatory push

Zebec’s move reflects a shift toward embedding compliance at the protocol level, with firms facing more stringent regulatory requirements.

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Kemi Badenoch to launch review into ECHR exit

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Kemi Badenoch to launch review into ECHR exit

Kemi Badenoch is to launch a review into whether the UK should leave the European Convention on Human Rights (ECHR) – and set out plans to revive a Rwanda-style deportation scheme.

In a speech on Friday, the Conservative leader will announce a commission into how lawyers could be prevented from using international legislation to block government decisions on immigration.

Politics Live: Senior Tory to take aim at Truss and Farage in speech

She will also announce plans to prevent people who arrive by small boat from claiming asylum and deport them to a third country.

It is unclear if this would be Rwanda or another location.

One of Labour’s first acts in government was to scrap the Tories’ Rwanda scheme, which would have deported illegal immigrations to the African nation for them to claim asylum there.

The plan was held up by a series of legal challenges and ultimately failed to get off the ground before the election, despite around £700m being spent on it, according to the Home Office.

More on Kemi Badenoch

The saga sparked a debate within the Tory party about whether the UK would need to leave the ECHR, which was established after the Second World War and sets out the rights and freedoms of people in the 46 countries signed up to it.

During the Conservative leadership race, Ms Badenoch said leaving the ECHR wasn’t a “silver bullet” and “not even the most radical thing that we probably will have to do” to control immigration.

It put her at odds with her rival Robert Jenrick, now the shadow justice secretary, who claimed the Tories would “die” if they did not back exiting the ECHR.

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‘Britain has lost control of its borders’

Ms Badenoch’s commission will be chaired by Tory peer and former justice minister Lord Wolfson of Tredegar, the shadow attorney general.

A Conservative Party aide close to the detail said: “Kemi has worked hard to bring the shadow cabinet together on this very difficult issue.

“She has always said she will take her time to build a proper, workable plan to tackle the issue of the courts subverting parliamentary democracy. This commission, led by the brilliant lawyer Lord Wolfson, will make sure we’re ready to take the tough decisions.”

Reform UK leader Nigel Farage, who has enjoyed a meteoric rise in the polls since the general election, has also said he would leave the ECHR.

Read More:
What are Starmer’s new immigration rules?
‘Farage could become PM – this is how Labour can stop him’

Pic: Reuters
British Prime Minister Rishi Sunak speaks during a press conference at Downing Street in London, Britain, April 22, 2024. REUTERS/Toby Melville/Pool
Image:
Rishi Sunak’s Rwanda plan failed to get off the ground

Labour’s policy is to remain in it, but to bring forward legislation to “ensure it is the government and parliament that decides who should have the right to remain in the UK”.

According to the immigration white paper unveiled last month, this would address cases where Article 8 right to family life legal arguments have been used to frustrate deportation, often in the case of foreign criminals.

Article 8 was also used in the case of a Palestinian family fleeing Gaza after they applied to enter the UK through a Ukrainian refugee scheme.

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Home Secretary Yvette Cooper told the Home Affairs Select Committee on Tuesday that family migration has become “so complex” that courts are applying “exceptional” human rights guarantees to about a third of cases.

She said: “The proportion of decisions being taken as exceptional – often under interpretations around Article 8 – end up being about 30 percent of the cases. That is not exceptional, that is a much broader proportion.”

However, she rejected calls to disapply the ECHR, saying compliance with international law has helped the government strike deals with France and Germany to help crack down on criminal gangs.

She said the government will draw up a “clear framework” that will be “much easier for the courts to interpret and will reflect what the public want to see”.

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