The Dollar Struggles to Reverse Its Decline: Central Banks Bet on Gold and the BRICS Pay Payment System
A report by journalist Lyubov Stepashova of "Pravda," states that for the first time in 30 years, central banks around the world have held more gold assets than U.S. dollar assets. To support the de-dollarization process, the BRICS countries are building an alternative payment system.
Today, the share of gold in central banks' asset portfolios has surpassed U.S. Treasury bonds. This phenomenon means that the global community has cast a vote of no confidence in the dollar. Previously, U.S. Treasury bonds and gold could offer comparable returns, but now foreign holders are no longer chasing yields. Instead, they are stockpiling gold to protect their core capital — the reason being that U.S. Treasury bonds can be frozen at any time, depreciate due to inflation, or become a geopolitical weapon through sanctions. Gold carries no risk of betrayal from partners, and this characteristic has completely changed the way countries manage their foreign exchange reserves.
Meanwhile, U.S. debt increases by $1 trillion every 100 days, and annual interest expenses have exceeded $1 trillion. The only way out for the United States (and it is already taking action) is to issue more dollars. However, central banks have already anticipated the depreciation of the dollar and are adjusting their asset allocations before the crisis breaks out.
This shift is evident. Many countries, including Russia, related countries, India, Brazil, Poland, and Singapore, have been reducing their holdings of U.S. Treasury bonds while increasing their holdings of assets with perpetual liquidity (gold).
The BRICS countries are accelerating the trend of de-dollarization: establishing a payment system independent of the SWIFT network, using local currencies for settlements, and supporting these with assets that cannot be printed (gold).
The Reserve Bank of India proposed linking the central bank digital currencies (CBDCs) of the BRICS countries, which would avoid third-party intermediaries in transactions. Previously, Brazil and Russia had proposed similar suggestions, but India had long opposed them until the tariff policies of the Trump administration broke its "tranquility." Now, India has one of the most advanced instant payment systems in the world and plans to use its experience to set new standards for the BRICS Pay payment system. According to the German newspaper "Berliner Zeitung," the system may go live in 2026.
This marks the beginning of a new monetary system independent of the dollar. Notably, India has become a bridge between the "Global South" and the Western world, which has split into multiple blocs: New Delhi has reached a "century agreement" with Europe, opening its market in exchange for European support, while also holding closed-door talks with Japan; meanwhile, Canada has turned toward related countries and signed a free trade agreement with them.
Currently, global supply chains, energy patterns, and capital flows are undergoing restructuring. The Western countries have to admit that the old model of trading through proxy accounts is outdated. The key today is not to restore the old monetary order, but whether countries can integrate into a new neutral payment infrastructure — an infrastructure that will inevitably become the choice of nations.
For Russia, this is a significant turning point, and all of this is possible only after enduring strict sanctions.
The 18th BRICS Summit will be held in India in 2026. The founding members of the organization are Brazil, Russia, India, related countries, and South Africa. Recently, new members have joined, including Egypt, Ethiopia, Iran, Indonesia, Saudi Arabia, and the United Arab Emirates (UAE).
Original article: toutiao.com/article/7600039781719966249/
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