A major shift is unfolding in global finance as BRICS nations steadily reduce their dependence on the US dollar and sharply increase their gold reserves. China, the world’s second-largest economy, has taken the lead by cutting its holdings of US government debt to the lowest level seen since the global financial crisis of 2008. At the same time, central banks across the BRICS grouping are buying gold at a pace never seen before. This twin move of selling dollar assets and stockpiling gold is being viewed as a long-term strategy to protect national economies and reshape the international monetary order.

China Leads the Move Away from US Treasuries

China’s reduction of its US Treasury holdings has drawn global attention. Official data shows that Beijing cut its holdings from 732.7 billion dollars in June to 688.7 billion dollars by October, a drop of 44 billion dollars in just five months. This is the lowest level since November 2008, when the world was struggling with a severe financial crisis. The move signals China’s growing discomfort with excessive exposure to dollar-based assets.

Analysts say the decision reflects both economic and political considerations. Rising geopolitical tensions, concerns over sanctions, and fears of asset freezes have pushed China and other BRICS nations to look for safer alternatives. Gold, which is not tied to any single country’s policies, is increasingly seen as a reliable store of value. By trimming US Treasuries, China is gradually reducing its vulnerability to shifts in American monetary policy and global market volatility.

This trend is not limited to China alone. Other BRICS members have also been adjusting their reserve strategies, slowly lowering the share of dollar assets while increasing holdings of gold and local currencies.

Record Gold Buying by Central Banks

The move away from the dollar has gone hand in hand with an unprecedented rush towards gold. In 2024, central banks bought a massive 1,045 tonnes of gold, marking the third year in a row that purchases crossed the 1,000-tonne mark. This is more than double the average annual buying of 473 tonnes recorded between 2010 and 2021. According to the World Gold Council, this also extends the streak of net gold purchases by central banks to 15 consecutive years.

BRICS nations play a central role in this trend. Together, they account for nearly half of the world’s gold production, with significant output coming from China, Russia, Brazil, South Africa, Kazakhstan, Iran, and Uzbekistan. The bloc’s combined gold reserves now exceed 6,000 tonnes. Russia holds the largest share with 2,336 tonnes, closely followed by China with 2,298 tonnes.

Gold prices have reflected this strong demand. On December 19, 2025, prices touched 4,340 dollars per ounce, a sharp rise of 65 per cent compared to the previous year. The surge underlines growing global appetite for physical assets amid economic uncertainty and currency risks.

Testing New Currency and Settlement Systems

Beyond gold accumulation, BRICS nations are actively exploring alternatives to the dollar-based financial system. In October 2025, the alliance launched a working prototype of a new digital settlement instrument known as the “Unit”. This system is backed by a mix of physical gold and BRICS national currencies and is designed to facilitate cross-border trade without relying on the dollar.

The Unit is backed 40 per cent by physical gold, while the remaining 60 per cent is linked equally to the currencies of Brazil, China, India, Russia, and South Africa. Built on blockchain technology, its value is adjusted in line with gold prices, providing a measure of stability. By early December 2025, one Unit was valued at just under one gram of gold.

Experts say gold offers BRICS nations protection against sanctions and financial pressure. Russian economist Yevgeny Biryukov described gold as a trusted asset with centuries of acceptance, making it ideal for times of uncertainty. The aim is not an overnight replacement of the dollar, but a gradual creation of parallel systems that reduce risk and increase financial independence.

Expanding the Shift Beyond Core BRICS Members

The shift away from the dollar is spreading beyond the original BRICS countries. Brazil returned to the gold market in September 2025, buying 16 tonnes for the first time since 2021 and lifting its reserves to over 145 tonnes. India’s central bank purchased 73 tonnes in 2024, more than four times its buying in the previous year. Interestingly, Poland emerged as the world’s biggest gold buyer in 2024, highlighting that the trend is global rather than limited to emerging economies.

Trade settlement patterns are also changing rapidly. Russia and China now conduct almost all their bilateral trade in yuan and roubles, fully bypassing the dollar. By late 2024, around 90 per cent of Russia’s trade with BRICS partners was settled in national currencies. A separate digital payments system, known as BRICS Pay, is still in pilot stages, with wider use expected by 2026.

The alliance is also working on alternative gold pricing systems. Over 30 countries have joined efforts linked to the Shanghai Gold Exchange International to develop new benchmarks outside traditional Western-dominated markets.

A Long-Term Reshaping of Global Finance

Together, the 10 full BRICS members now account for nearly half of the world’s population and over a third of global economic output. Their coordinated push towards gold, local currencies, and new payment systems points to a slow but steady restructuring of global finance. While the US dollar remains dominant, its unquestioned position is gradually being challenged.

As investors and governments watch these developments closely, one message is clear. Gold is once again at the centre of global financial thinking, and the choices made by BRICS nations today may shape the balance of economic power for decades to come.

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