- BRICS nations, especially Iran and Russia, are actively moving away from using the US dollar in their trade dealings.
- The de-dollarization trend is driven by economic sanctions and geopolitical shifts, with over 90% of Russia’s trade with China and India now in national currencies.
The global push toward de-dollarization is gaining momentum, particularly among BRICS nations. Despite the US dollar’s enduring dominance in international trade, several countries have taken significant steps to reduce their reliance on the greenback. Economic sanctions and shifting geopolitical alliances have fueled the trend.
Iran and Russia, both members of the BRICS bloc, have officially moved away from using the US dollar in their trade dealings. Mohammad Reza Farzin stated:
We (BRICS members Iran and Russia) have entered into a currency agreement with Russia and fully removed the US dollar. Now we only trade in rubles and rials.
The agreement was bolstered by a currency swap policy established in July 2024 as central banks from the two nations integrated their financial systems. Trade between Russia and Iran has been further streamlined with the adoption of the Mir payment system, bypassing the SWIFT network. Iranian nationals can now withdraw rials from ATMs in Russia.
BRICS Nations Lead the Charge – Dollar’s Dominance Under Threat
Both Iran and Russia face stringent sanctions from Western nations, making dollar-based trade increasingly impractical. These restrictions have inadvertently fueled the de-dollarization movement, with over 90% of Russia’s trade with China and India now conducted in national currencies. Such bilateral agreements are rapidly becoming the norm within BRICS and its extended “BRICS Plus” network.
Southeast Asian nations have also shown interest in this shift. For example, Vietnam maintains strong defense and investment ties with Russia, while Malaysia facilitates Iran’s oil exports to East Asia. These partnerships highlight the practical benefits of diversifying away from the US dollar, particularly for countries that seek to avoid entanglement in Western economic sanctions.
While de-dollarization efforts gain traction, the US dollar still accounts for 88.4% of foreign exchange transactions, according to Statista. Moreover, 59% of official foreign exchange reserves are held in dollars. Despite these figures, the momentum among BRICS nations suggests a potential rebalancing of global financial power.
Trump’s Warning to BRICS Nations
Although the BRICS bloc’s ambitions are clear, the road ahead is complex. President-elect Donald Trump recently issued a stern warning to BRICS nations, saying:
We require a commitment from these countries that they will neither create a new BRICS currency nor back any other currency to replace the mighty U.S. dollar or they will face 100% tariffs and should expect to say goodbye to selling into the wonderful U.S. economy.
Trump’s aggressive stance has drawn mixed reactions. While some nations within BRICS remain united in their pursuit of financial autonomy, others, such as India, have distanced themselves from any broad “anti-dollar” initiatives. Additionally, divisions within the bloc—between the authoritarian axis of Russia and China and the democratic coalition of India, Brazil, and South Africa—highlight the challenges of forming a unified front.
Key nations like Indonesia have also opted to stay out of BRICS, wary of becoming entangled in a China-led anti-Western agenda. This reflects the growing divide among emerging economies, which seek to balance their aspirations for independence with practical considerations of global trade dynamics.
