The US dollar took a sharp hit on Jan. 27, 2026, dropping about 1.3% — its worst single-day slide since April 2025 and the weakest level since February 2022. President Donald Trump downplayed the move, telling reporters: “I think it’s great. I mean the value of the dollar, look at the business we’re doing. No, [the] dollar is doing great.” That drop has renewed discussion about a broader geopolitical and financial shift: BRICS countries accelerating efforts to build parallel payment and settlement systems that reduce dependence on the dollar. The push combines central bank digital currencies (CBDCs), alternative messaging networks, commodity and resource-backed trade arrangements, and rising gold accumulation — a mix that could reshape cross-border payments and has clear implications for the crypto and digital-assets ecosystem. What BRICS are building - CBDC integration: India’s central bank has proposed linking member-state CBDCs — e.g., the e-rupee and the digital yuan — to create direct payment rails between BRICS countries. Moscow unveiled a BRICS Pay prototype in late 2024 and plans wider rollouts in 2026–2027. - Alternative messaging and rails: Russia’s SPFS and China’s CIPS now connect more than 130 financial institutions across roughly 100 countries, enabling transactions that bypass Western messaging systems. - National-currency trade: By late 2024, Russia and China had shifted about 90% of bilateral trade into their own currencies. India is already invoicing oil deals with the UAE and Russia in rupees. - Commodity and resource leverage: BRICS control a large share of strategic minerals — estimated at about 72% of global rare earths — and are major suppliers of nickel, palladium and cobalt. Member states are exploring commodity exchanges and settlement mechanisms that let them trade directly in local currencies. - Gold and reserves: BRICS central banks reportedly added more than 1,100 tonnes of gold in 2025. Some analysts tracking import data estimate China’s real holdings could be closer to 12,000 tonnes when unreported reserves are included. Combined BRICS gold reserves now reportedly exceed those of the Eurozone. - Petrodollar erosion: A notable policy shift occurred in June 2024 when Saudi Arabia allowed a 50-year arrangement tied to dollar-denominated oil sales to lapse. The UAE now accepts yuan for oil, and several BRICS members are studying trade baskets that include oil, gold and rare earths. Political framing and caveats Russian President Vladimir Putin framed the approach as pragmatic: “We are not refusing, not fighting the dollar, but if they don’t let us work with it, what can we do? We then have to look for other alternatives, which is happening.” Yet important caveats remain. India’s External Affairs Minister S. Jaishankar has stressed caution: “I do not believe we have any policy to have a replacement to the dollar. Global economic stability is pegged on the dollar… the last thing we want is less economic stability.” Practical and political obstacles are real. Projects like BRICS Bridge and CBDC interoperability face technical hurdles, coordination challenges and geopolitical tensions — India and China, for example, have divergent priorities and unresolved border disputes. Many experts expect a phased rollout of parallel systems, with full implementation more likely in the 2028–2030 window rather than immediate replacement. Where the dollar stands Despite the headline-grabbing developments, the dollar remains dominant in global finance. The Bank for International Settlements reported that about 89% of foreign exchange transactions still involved the dollar in early 2025. Analysts tend to describe the current trend as “de-domination” — a steady slimming of the dollar’s role rather than an abrupt replacement. Market outlook and implications - Dollar Index forecasts: Some market analysts project the dollar index could slide toward the mid-90s (around 94) in Q2 2026, contingent on Fed rate decisions and inflation data. - Policy and trade drivers: Ongoing Fed policy uncertainty, trade tensions and the growth of alternative payment rails will influence the dollar’s trajectory. - For crypto markets: Rapid CBDC development and new cross-border rails could change fiat-crypto onramps, tokenized reserves and stablecoin dynamics, even as the dollar retains a dominant global role. Bottom line The moves by BRICS to build alternative payment mechanisms, pair them with commodity and gold-backed settlement options, and expand the use of national currencies represent one of the most significant shifts in international trade since the Bretton Woods era. But the shift is likely to be gradual and contested. The dollar’s immediate dominance isn’t ending overnight — instead, we’re watching the emergence of parallel infrastructure that could steadily reduce dollar dependence over the coming years. Key things to watch: CBDC interoperability tests, BRICS Pay rollouts in 2026–27, continued gold purchases, and central-bank policy decisions that will shape currency markets. Read more AI-generated news on: undefined/news

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