BRICS Gold-Backed Currency: Threat to the US Dollar?
Key Takeaways
- The “Unit,” a gold-backed digital trade currency (40% gold / 60% BRICS currency basket), launched as a pilot in October 2025 with only 100 units issued - infrastructure testing, not dollar replacement.
- The US dollar’s share of global reserves stands at 56.9% (Q3 2025, IMF COFER) - down from 72% in 2001 but stable since 2022, declining at roughly 0.6% per year.
- China-Russia bilateral trade is now 99.1% settled in rubles and yuan (January 2026), but broader BRICS members have not committed to replacing the dollar.
- Gold reached $5,190/oz in March 2026 - exceeding original predictions - driven by geopolitical volatility, not BRICS currency anchoring.
- CIPS processed RMB 175.49 trillion ($24.47T) in 2024, but still relies on SWIFT for 80% of its messaging infrastructure.
Editor’s Note (March 2026): This article was originally published in June 2023, ahead of the BRICS Leaders’ Summit in Johannesburg. At that time, there was significant speculation about a gold-backed BRICS currency that could challenge the US dollar’s dominance. Three years on, the situation has evolved considerably. The August 2023 summit did not produce a new currency. A pilot “Unit” was launched in October 2025, but as a blockchain-based trade settlement instrument with only 100 units issued - far from the system-wide alternative originally envisaged. The analysis below has been updated to reflect what actually happened versus what was predicted, while preserving the original thesis about BRICS’ growing economic influence and the structural pressures on dollar dominance. Where original predictions have not materialised, we say so explicitly.
Is BRICS Creating a Currency to Replace the US Dollar?
Not yet - and the timeline has shifted significantly from original expectations. The BRICS bloc has not created a unified currency. What it has produced is “The Unit,” a pilot gold-backed digital trade instrument (40% gold, 60% BRICS currency basket) launched in October 2025 with only 100 units issued on the Cardano blockchain. This is infrastructure testing, not a dollar replacement. The more consequential developments are bilateral: China-Russia trade is 99.1% settled in local currencies, CIPS processed $24.47 trillion in 2024, and the mBridge multi-CBDC project has handled $55.5 billion across 4,000+ transactions. The dollar’s share of global reserves stands at 56.9% - declining, but slowly and from a position of deep structural dominance.
There is an ongoing development that poses a potential threat to the dominance of the U.S. dollar in international transactions. The group of countries known as BRICS has been spearheading a monetary shift, aiming to reduce reliance on the dollar as a leading medium of exchange and reserve currency.
While the process itself bears some similarities to the rise of the U.S. dollar under the Bretton Woods system in 1944 and the subsequent creation of Special Drawing Rights (SDRs) in 1969, it is important to note the distinguishing aspects. What connects these historical events, along with the current BRICS initiative, is the significance of gold.
The BRICS bloc expanded in January 2024, with Egypt, Ethiopia, Iran, and the UAE formally joining. Saudi Arabia, notably, did not formally accede - it indicated interest but has not made a final decision. An additional 13 countries were invited as “partner countries” in October 2024. With these additions, the BRICS+ grouping now represents a formidable share of global economic activity.
BRICS vs G7: Key Economic Indicators
The scale of the BRICS bloc becomes clear when compared directly against the G7 nations across key metrics.
| Metric | BRICS+ (2025) | G7 (2025) | Source |
|---|---|---|---|
| Share of World Population | ~48% | ~10% | World Bank |
| Share of Global GDP (PPP) | ~41% | ~28% | IMF WEO April 2025 |
| GDP Growth Forecast (2025) | 3.4% | ~1.5% | IMF |
| Central Bank Gold Purchases (2025) | 863 tonnes (all central banks) | Net sellers | World Gold Council |
| Share of Global Wheat/Rice Production | ~50% | ~15% | FAO |
| Share of World Landmass | ~30% | ~16% | World Bank |
Sources: IMF World Economic Outlook April 2025, World Gold Council Gold Demand Trends 2025, FAO, World Bank.
Considering their immense demographic, economic, and resource strengths, the BRICS nations form a formidable alternative to the Western-centric power structure. The desire to reduce reliance on the U.S. dollar in international trade has gained significant traction among BRICS members and their major trading partners.
BRICS De-dollarisation: Predictions vs Reality
The original 2023 analysis made several predictions about how a BRICS currency would challenge the dollar. Here is what actually happened.
| What Was Predicted (2023) | What Actually Happened (by March 2026) | Source |
|---|---|---|
| Gold-backed BRICS currency launched at August 2023 summit | No currency launched. “The Unit” pilot launched Oct 2025: 40% gold / 60% currency basket on Cardano blockchain. Only 100 Units issued. | CCN, Insights on India |
| Saudi Arabia joins BRICS as founding expansion member | Saudi Arabia did NOT formally join. Four members joined Jan 2024 (Egypt, Ethiopia, Iran, UAE). 13 partner countries invited Oct 2024. | Carnegie Endowment |
| De-dollarisation reaches 50%+ of BRICS trade within 2-3 years | China-Russia trade: 99.1% in local currencies. Broader BRICS: bilateral agreements only. India explicitly stated “no policy to replace the dollar.” | CSIS, Chicago Policy Review |
| CIPS replaces SWIFT as global standard | CIPS processed RMB 175.49T ($24.47T) in 2024 (+24% YoY). Connects 1,600 participants in 180+ countries. But still relies on SWIFT for 80% of messaging. | CSIS, FX Centel |
| Dollar share of reserves drops below 50% by 2025 | Dollar share: 56.9% (Q3 2025). Down from 72% (2001) but stable since 2022. Decline rate: ~0.6% per year. | IMF COFER, Federal Reserve |
| Gold reaches $3,000-3,500/oz driven by BRICS currency demand | Gold reached $5,190/oz (March 2026). Exceeded prediction, but driven by geopolitical volatility and central bank purchasing, not BRICS currency anchoring. | Fortune, World Gold Council |
Sources: IMF COFER Dashboard, Federal Reserve, BIS, Fortune, Carnegie Endowment, CSIS.
The momentum behind de-dollarisation continues, reshaping digital payment systems worldwide. George Yeo, the former Foreign Minister of Singapore, highlighted the growing global shift away from reliance on the U.S. dollar, noting that the dominance of the US on the world stage is largely enabled by the strength of the dollar and the “exorbitant privilege” the US enjoys as a result:
“I’m quite sure that among the big countries, China, Russia, and others, especially those in BRICS, there will be a push for an alternative system. Not to replace the current system, but to tell the US, ‘Look, don’t overplay this, because if you do, we have an alternative.’ It’s not as good, but we won’t be hostage to the current system.”
This sentiment is backed by concrete shifts in trade patterns. As of January 2026, Russia and China conduct 99.1% of bilateral trade in rubles and yuan (per Russian Finance Minister Siluanov). China made its first gas payment to the UAE in yuan in 2023, and currency swap agreements have expanded across Brazil-China (yuan-real) and India-Russia (rupee-oil) corridors. However, these remain bilateral arrangements - not the coordinated BRICS-wide settlement system originally envisaged.
The Unit: What Actually Launched
In October 2025, “The Unit” was launched as a pilot gold-backed digital trade currency. The structure: 40% physical gold, 60% basket of BRICS currencies (Brazil real, China yuan, India rupee, Russia ruble, South Africa rand - equally weighted). It was deployed on the Cardano blockchain with only 100 Units issued.
This is infrastructure testing, not a dollar replacement. By December 2025, the reserve value had already declined from 100 grams to 98.23 grams of gold equivalent. The Unit demonstrates the concept but falls orders of magnitude short of the scale needed to shift global settlement patterns.
The Real Infrastructure: mBridge and CIPS
The most significant progress in BRICS-aligned payment infrastructure has come not from a new currency but from existing systems:
mBridge, the multi-CBDC bridge project involving central banks of China, Hong Kong, Thailand, UAE, and Saudi Arabia (with 31 observer institutions), has processed $55.5 billion cumulatively across 4,000+ transactions. Growth has been substantial - 2,500x from the 2022 pilot - but 95% of settlement volume is in Chinese digital yuan (e-CNY). The BIS handed operational control to participating central banks in 2025.
CIPS (China International Payment System) processed RMB 175.49 trillion ($24.47T) in 2024, representing 24% year-over-year growth. It connects 1,600 direct and indirect participants across 180+ countries. However, CIPS still relies on SWIFT for approximately 80% of its messaging infrastructure. It complements SWIFT rather than replacing it.
Learn how Aerapass supports multi-currency trading and settlement across emerging markets
What This Means for Investors
The original analysis was directionally correct on several fronts: BRICS expanded, de-dollarisation accelerated in bilateral channels, and gold prices surged well beyond the $3,000 target. Where it overstated the case was in expecting a coordinated, system-wide currency alternative by 2025-2026.
The reality is more nuanced. De-dollarisation is happening, but it is bilateral (China-Russia, China-Brazil), not multilateral. The dollar’s reserve share is declining, but slowly (0.6% per year) and from a position of structural dominance (56.9%). Gold functions as a hedge against geopolitical uncertainty, not as the anchor of a new monetary system.
For investors and their asset allocation strategies, the implications are:
- Gold as a portfolio hedge remains well-supported at $5,190/oz, driven by central bank purchasing (863 tonnes in 2025 alone) and geopolitical demand. Gold’s role is as a store of value, not as a BRICS currency anchor.
- Multi-currency exposure is increasingly important as bilateral trade agreements reduce dollar intermediation in specific corridors. Platforms that enable multi-asset exchange across these emerging settlement channels will be well-positioned.
- Dollar resilience should not be underestimated. At 56.9% of global reserves with the deepest capital markets, the most liquid government bond market, and network effects across global trade, the dollar’s structural advantages remain intact for the foreseeable future. At the current rate of decline, reserve parity with other currencies would take decades.
The BRICS story is not over - but it is evolving from a dramatic “currency war” narrative into a pragmatic, bilateral, infrastructure-building process. The winners will be platforms and institutions that can operate across both dollar-denominated and emerging local-currency settlement systems.
BRICS Currency vs US Dollar: What Would Change for Investors?
| Factor | If BRICS currency gains traction | If dollar dominance persists | Current trajectory |
|---|---|---|---|
| Reserve diversification | Institutional demand for BRICS-denominated assets | Dollar assets remain default allocation | Gradual shift; dollar declining at ~0.6%/year |
| Trade settlement | Multi-currency corridors expand; FX hedging complexity increases | Dollar remains primary settlement currency | Bilateral (China-Russia, China-Brazil), not multilateral |
| Gold allocation | Gold anchoring drives structural demand above central bank purchasing | Gold remains cyclical hedge | Gold at $5,190/oz; central banks bought 863t in 2025 |
| Platform requirements | Multi-rail, multi-currency infrastructure becomes essential | Single-currency platforms remain viable | Multi-rail already preferred by institutions seeking optionality |
Frequently Asked Questions
What Countries Are in BRICS and What Is Their Combined Economic Weight?
BRICS+ now includes the original five members (Brazil, Russia, India, China, South Africa) plus Egypt, Ethiopia, Iran, and the UAE, which joined in January 2024. An additional 13 countries were invited as “partner countries” in October 2024. Collectively, BRICS+ represents approximately 48% of the world’s population, 41% of global GDP (PPP), and roughly 30% of the world’s landmass. Their combined GDP growth forecast of 3.4% for 2025 exceeds the G7’s approximately 1.5%.
How Would a BRICS Currency Affect Global Trade and Investment?
A fully functional BRICS currency would reduce dollar intermediation in trade between member nations, increase demand for BRICS-denominated financial instruments, and require platforms to support multi-currency, multi-rail settlement. However, the current trajectory points to bilateral arrangements (yuan-ruble, yuan-real) rather than a unified currency. India has explicitly stated it has “no policy to replace the dollar.” The practical impact for investors is the need for multi-currency exposure and platform infrastructure that can operate across both dollar-denominated and emerging local-currency settlement systems.
The content on this page is produced by Aerapass for general informational purposes only and does not constitute financial advice, investment advice, or any other form of professional advice. Aerapass is a technology platform provider serving financial institutions, wealth managers, and fintech companies. Before making any financial decision, you should consult with a qualified, licensed financial advisor who can take your individual objectives and circumstances into account.
