De-dollarisation, BRICS news: The BRICS countries’ bid for dedollarization receives yet another boost with China’s declaration of interest in the digital yuan (e CNY digital Yuan), effective January 1, 2026. The move might have been taken silently, but its goal is highly ambitious. This facility may enable the Chinese digital currency to emerge as a primary settlement and savings tool, as other Central Bank Digital Currencies (CBDCs) don’t offer incentives to their holders. As the global monetary landscape undergoes a gradual but significant transition, this Chinese move may trigger the incentivization of CBDCs by other countries, leading to a reduced dependence on the US Dollar. As BRICS nations now control nearly 50% of global gold production and hold a substantial share of official gold reserves, this development carries significant implications for the long-term dominance of the US dollar in the worldwide economy.
Speaking on the Chinese move, Sugandha Sachdeva, Founder of SS WealthStreet, said, “What we are witnessing is not an abrupt rejection of the dollar, but a steady reduction in over-reliance on it. Confidence in fiat currencies, particularly the US dollar, has been eroded over time due to persistent monetary expansion following the abandonment of the gold standard in 1971. Excessive money printing by Western economies to stabilise growth cycles has diluted purchasing power and raised concerns around currency debasement. In response, central banks are increasingly reallocating reserves towards hard assets, with gold emerging as the preferred hedge against monetary uncertainty and geopolitical risk.”
However, BRICS countries and their allied nations raising their gold reserves may not be enough to challenge the supremacy of the US Dollar in the near term. Hence, countries like China are taking one step at a time to reduce their dependence on the US Dollar.
What does this Chinese move mean for the USD?
Decoding this Chinese move, Dilip Parmar, Senior Research Analyst at HDFC Securities, said, “It is less of a silent preparation and more of a calculated escalation from China. By paying interest, China is removing the last major hurdle for investors — and potentially foreign governments — to treat the digital yuan as a primary savings and settlement tool. At the same time, other CBDCs don’t give any incentives. They may gain a first-mover advantage while other countries are projected to roll out. However, there are a few catches in it as China still limits how much money can move in and out of the country.”
“Investors are hesitant to hold a currency they cannot easily trade. The e-CNY’s “controllable anonymity” means the PBOC can track every transaction, which may deter international users who value privacy. Over 80% of global trade is still invoiced in US dollars. Switching to a new system requires a “critical mass” of countries to move simultaneously,” Dilip Parmar of HDFC Securities said.
Why does dollarisation matter for BRICS countries?
A significant trigger for dedollarization occurred after the outbreak of the Russia-Ukraine war, when Western sanctions led to the freezing of Russia’s dollar-denominated reserves. That episode fundamentally altered how emerging economies perceive the safety of reserves. Since then, the BRICS bloc has been actively strengthening its push towards a multipolar monetary system, reducing dependence on the dollar and US Treasuries while expanding gold holdings and local-currency trade settlements.
“BRICS nations collectively now hold over 6,000 tonnes. Russia and China alone account for more than 2,000 tonnes each, while India’s reserves exceed 800 tonnes. At the production level, China and Russia remain among the world’s largest gold miners, giving the bloc growing influence over the physical supply chain,” said Sugandha Sachdeva.
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