Deutsch
English
Español
Français
Nederlands
Português
Under India's 2026 BRICS chairship, the mBridge platform is moving toward live deployment, enabling real-time cross-border payments using interoperable central bank digital currencies (CBDCs) that bypass the SWIFT network. The US dollar's share of global reserves has fallen below 57% for the first time in three decades, while BRICS+ nations now settle roughly 67% of intra-bloc trade in local currencies, up from under 30% a decade ago. This article examines how the combination of CBDC infrastructure, gold accumulation, and yuan-denominated oil contracts signals a structural shift toward a multipolar reserve system with profound implications for US borrowing costs, sanctions effectiveness, and global financial stability.
What Is mBridge and Why Does It Matter?
mBridge (Multiple CBDC Bridge) is a blockchain-based platform developed by the Hong Kong Monetary Authority, the Bank of Thailand, the Central Bank of the UAE, the People's Bank of China, and the Bank for International Settlements (BIS). The BIS handed over the project to its partners in October 2024, and Saudi Arabia joined in June 2024. The platform uses a distributed ledger called the mBridge Ledger to enable instant, peer-to-peer cross-border payments and foreign exchange transactions using CBDCs, cutting transaction times from days to seconds and costs from up to 8% to near zero. In 2025, the UAE executed its first government financial transaction using the Digital Dirham over the platform. Under India's chairship, the BRICS CBDC bridge is now being expanded to link all BRICS members' digital currencies, including India's e-Rupee, China's digital yuan, Brazil's Drex, and Russia's digital ruble.
The Dollar's Reserve Share Hits a 30-Year Low
According to IMF COFER data, the US dollar's share of global foreign exchange reserves fell to 56.9% in Q3 2025, the lowest since 1994. This marks a dramatic decline from 71% at the turn of the millennium. Key drivers include the 2022 freezing of $300 billion in Russian central bank assets, which prompted central banks to diversify; US fiscal deterioration, with national debt exceeding $39 trillion (120% of GDP); and the rise of alternatives such as China's CIPS payment system, now connecting over 5,000 institutions across 190 countries. The dollar still settles 88% of global forex transactions, but its reserve share erosion is accelerating. The declining dollar dominance has direct implications for US borrowing costs, as foreign demand for Treasury securities helps keep yields lower.
BRICS Local Currency Trade Surges to 67%
BRICS+ nations now conduct approximately 67% of their intra-bloc trade in local currencies, up sharply from under 20% a decade ago. Russian President Vladimir Putin announced at the 2025 BRICS summit in Rio de Janeiro that 90% of transactions between member countries are now settled in local currencies. Russia and China have led this de-dollarization effort, expanding influence in Africa, Asia, and Latin America. The shift is supported by China's CIPS system, which processes $25 trillion annually, and the mBridge platform, which has processed $55.5 billion. McKinsey's 2026 trade update confirms that global commerce is fracturing along geopolitical lines, with the US-China trade corridor shrinking 30% and over $165 billion in trade redirected. The BRICS de-dollarization strategy is reshaping global financial architecture and granting emerging economies greater negotiating power.
Yuan-Denominated Oil Contracts Approach 24% of Brent Volumes
Yuan-denominated oil contracts now approach 24% of daily Brent crude volumes, up from roughly 20% in 2024. Russia-China oil trade worth $19.14 billion in 2025 was settled predominantly in yuan, while India has also paid Russia for oil in the Chinese currency. Saudi Arabia's yuan-priced oil exports account for approximately 22% of its sales. This petroyuan breakthrough challenges the long-standing petrodollar system and represents one of the most tangible shifts in global energy trade dynamics.
Gold Accumulation: 2,100+ Tonnes Since 2022
BRICS central banks have accumulated over 2,100 tonnes of gold since 2022, with purchases accelerating each year. Central banks purchased 863 tonnes of gold in 2025 alone. BRICS+ nations now hold over 17% of the world's gold reserves (about 6,000 tonnes), up from 11.2% in 2019. Russia leads with 2,336 tonnes, followed by China (2,298 tonnes) and India (880 tonnes). A World Gold Council survey found that 73% of central bankers expect the dollar's reserve share to decrease further, with 43% planning to increase gold holdings. Gold's share of official reserves has more than doubled since 2015 to over 23%. This BRICS gold accumulation trend reflects a structural shift in reserve strategy driven by sanctions risk and declining dollar confidence.
Implications for US Borrowing Costs and Sanctions Effectiveness
The gradual erosion of dollar dominance has profound implications. Foreign holdings of US Treasury securities total approximately $7.4 trillion, and reduced demand could push up US borrowing costs. The Congressional Budget Office projects that interest payments on the national debt could exceed $1 trillion annually by 2027. Meanwhile, the effectiveness of US financial sanctions is being undermined as alternative payment systems like mBridge and CIPS allow targeted nations to bypass SWIFT. The sanctions evasion via CBDCs raises critical questions for US foreign policy and national security. However, analysts caution that the transition will be gradual and uneven, likely toward a fragmented multipolar system rather than a single alternative reserve currency.
Expert Perspectives
The mBridge platform represents the most tangible de-dollarization development in years, but internal BRICS divergences could slow progress, notes a senior analyst at the Atlantic Council. While the dollar remains dominant, its continued decline could make funding the US trade and budget deficits more difficult, warns a Wolf Street analysis of IMF data. McKinsey's 2026 trade update emphasizes that most organizations remain structurally under-equipped with static contracts and fragmented governance, losing approximately 9% of contract value in this volatile environment.
Frequently Asked Questions
What is mBridge?
mBridge is a blockchain-based platform that enables real-time, peer-to-peer cross-border payments and foreign exchange transactions using central bank digital currencies (CBDCs), bypassing traditional correspondent banking and the SWIFT network.
How much has the dollar's reserve share fallen?
The US dollar's share of global foreign exchange reserves fell to 56.9% in Q3 2025, the lowest level since 1994, down from 71% in 2000.
What percentage of BRICS trade is in local currencies?
BRICS+ nations now settle approximately 67% of intra-bloc trade in local currencies, up from under 20% a decade ago. Some reports indicate 90% for certain member pairs.
How much gold have BRICS central banks bought?
BRICS central banks have accumulated over 2,100 tonnes of gold since 2022, with total BRICS+ gold reserves now exceeding 6,000 tonnes (17% of global reserves).
What are the implications for the US dollar?
The gradual erosion of dollar dominance could lead to higher US borrowing costs as foreign demand for Treasury securities declines, and reduced effectiveness of US financial sanctions as alternative payment systems emerge.
Conclusion: A Multipolar Future
The combination of mBridge deployment, surging local currency trade, yuan-denominated oil contracts, and record gold accumulation points to a structural shift in the global financial system. While the dollar remains the dominant reserve currency, its share is declining at an accelerating pace. India's 2026 BRICS chairship marks a pivotal moment in this transition, with mBridge serving as the technological backbone for a multipolar reserve system. The path ahead is likely to be gradual and uneven, but the direction is clear: the era of unipolar dollar dominance is giving way to a more fragmented, multipolar financial landscape.
Follow Discussion