BRICS and De-Dollarization: Iran, UAE Join While Saudi Arabia Hesitates—India Recalibrates Russian Oil Strategy

Iran and UAE join BRICS as Saudi Arabia delays. India recalibrates Russian oil imports, balancing rupee settlements with Western pressure.
BRICSStrategy DeDollarization SaudiAmbiguity IndiaOilTrade IranUAEBRICS PetrodollarShift GlobalCurrencyFlows Geopolitics2025 FinancialSovereignty

 November 22, 2025

The BRICS bloc—Brazil, Russia, India, China, and South Africa—has shifted its financial strategy from the lofty ambition of creating a single unified currency to a more pragmatic, incremental approach. Rather than attempting to immediately rival the dollar with a common unit, the group is building alternative financial “rails” designed to reduce dependence on Western-dominated systems. This quiet revolution of de-dollarization is unfolding across several fronts: payment systems, local currency trade, development finance, and reserve diversification.

Alternative Payment Systems: At the heart of this effort is BRICS Pay, a proposed decentralized cross-border payment messaging system designed to bypass the US-controlled SWIFT network. The vision is to enable direct settlement of transactions in local currencies—such as Brazilian Real to Chinese Yuan—without the dollar as intermediary. Still in pilot stages, BRICS Pay is being developed as an open-source protocol, with demonstrations already underway. The long-term ambition is interoperability between national systems like China’s CIPS, Russia’s SPFS, India’s UPI, and Brazil’s Pix, creating a non-Western backbone for global trade.

Local Currency Trade: The most immediate success has come from bilateral trade agreements. Russia and China now settle the vast majority of their commerce in Rubles and Yuan, while China and Brazil have established a Yuan-Real mechanism covering more than $100 billion in annual trade.

India, though cautious due to its Western ties, initially deepened its reliance on Russian crude in 2025, often settling purchases in Indian Rupees or other non-dollar currencies. However, by late 2025, volumes declined under U.S. sanctions pressure, leaving India recalibrating rather than expanding its oil trade shift. With major energy producers such as Iran and the UAE now confirmed BRICS members, the bloc’s leverage in global energy trade is visibly expanding.

By contrast, Saudi Arabia’s accession remains pending—its invitation has not yet been ratified. Riyadh’s hesitation tempers expectations: while Iran and the UAE strengthen the bloc’s Gulf presence, Saudi Arabia’s ambiguity underscores the limits of BRICS’ immediate challenge to the petrodollar system.

The New Development Bank: Another pillar is the New Development Bank (NDB), conceived as a BRICS alternative to the IMF and World Bank. The NDB has expanded lending in local currencies, insulating borrowers from Dollar interest rates and exchange volatility. Its growing portfolio of approved projects underscores its role as a parallel institution, offering financial sovereignty to members outside Western frameworks.

Gold Reserve Diversification: Combined BRICS gold reserves exceeded 6,000 tonnes in 2025, representing a significant rise and about 20% of total global central bank holdings. India, China, Brazil, and Russia made substantial new purchases in 2025, actively shifting towards gold and away from dollar reserves.

Accumulating gold is widely seen as a hedge against US monetary dominance and as part of the bloc’s strategy for financial independence.

The Common Currency Question: The once-promoted idea of a single BRICS currency has been formally shelved.

Brazil, presiding over the bloc in 2025, has confirmed that the focus will remain on strengthening local currency trade and payment systems. The diversity of economies, divergent monetary policies, and geopolitical rivalries—particularly between China and India—make a unified currency impractical for now. After Brazil’s presidency in 2025, the rotational structure of BRICS governance passes the chairmanship to India, which is slated to host the 18th BRICS Summit in 2026.

In Summary, the BRICS strategy is not about overthrowing the dollar overnight but about gradually eroding its monopoly. By expanding local currency trade, building alternative payment rails, and diversifying reserves, the bloc is laying the foundation for a multipolar financial world. Yet technical hurdles, political caution, and Saudi Arabia’s hedging remind us that this is a slow, calculated process rather than a sudden revolution.

Join us again tomorrow as we discuss the ultimate question: What happens if the US administration's tariff threat is implemented? We will analyze the projections for US inflation and supply chain disruption in 2026 under a 100% tariff regime.

Don't miss our final installment tomorrow on the economic fallout!

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