BRICS launch gold "UNIT": is this really going to scare the dollar?

Every few years, someone solemnly buries the dollar. Usually, before that, they buy some gold, draw scary graphs of the US national debt and promise a “new monetary order”. This time, the BRICS bloc decided to try on the role of the gravedigger of the dollar, presenting the gold and currency unit of account UNIT and hinting that world trade can live without Washington’s greenbacks. But if you look closer, it turns out that this is more of a political gesture and an interesting financial construct than a real replacement for the system in which the dollar still feels very comfortable.

CCN explains: the new story about the "end of the dollar era" rests on two pillars - investor fears of a depreciation of the dollar due to US debt and monetary policy, as well as increasingly vocal attempts by the BRICS to promote alternative payment mechanisms, in particular the gold-backed UNIT.¹ This UNIT, according to the plan, should not be a regular fiat currency, but a unit of account tied to gold and a basket of currencies of the BRICS+ countries, which allows for international settlements, bypassing the dollar and SWIFT.^{1 3 5}

Where did the fears of "dollar dilution" come from?

CCN describes a phenomenon known on Wall Street as the "debasement trade" — an investor bet that the dollar will lose some of its purchasing power in the long term due to the explosive growth of US government debt and the massive infusion of liquidity.^{1 2 4} Against this backdrop, gold is hitting record highs, and with it, Bitcoin and other assets that marketers like to call “protection against fiat devaluation” are rising, even if sometimes they are more like protection against boredom.^{2 4}

Investors quoted by CNBC and Investopedia say it bluntly: “debasement trading” is a way to vote with your feet against central bank experiments by buying what cannot be printed: gold, partly bitcoin, and sometimes real assets like land or infrastructure.^{2 4} For the BRICS, this wave of fear is the perfect moment to offer the world something that looks "solider" than the dollar on paper and at the same time hits the political influence of the United States.

What is UNIT: gold plus a basket of currencies

According to CCN, InvestingNews, and insider reports, BRICS is working on a unit of account, UNIT, which does not replace national currencies, but exists on top of them as a common measure of value and payment instrument for international settlements.^{1 3 5} The key idea: UNIT should be backed by approximately 40% gold and the remaining 60% by a basket of BRICS+ currencies, which, at least theoretically, creates a “stronger” foundation than a regular fiat dollar or euro.^{3 5}

Some commentators, including analysts, refer to the formula “1 UNIT = 0,4 g of gold + weighted basket of BRICS currencies” circulating in financial circles as a reference point for the concept.^{5 7} The system should be purely digital, run on blockchain infrastructure, and be used primarily as a settlement tool between central banks and large corporations, not as a currency for tourists in duty-free.

Where did this BRICS “gold obsession” come from?

BRICS has been actively buying gold for several years: in 2024, the world's central banks added more than 1,000 tons of the metal to their reserves, with the lion's share of purchases falling to China, Russia, India, and other countries associated with BRICS.^{3 6} All of this is presented as “reserve diversification” — a nice euphemism for the real motive: to reduce dependence on dollar assets, which the US can block or make difficult to access through sanctions.^{3 6 8}

InvestingNews and specialized gold analysts note that the BRICS are systematically increasing their gold reserves precisely against the backdrop of conflicts with Washington: from the US-China trade war to sanctions against Russia.^{3 6 9} Gold in this logic is a “neutral” reserve asset: it cannot be blocked in SWIFT, it does not depend on the decisions of the Fed, and the physical metal can be kept in its own storage facilities, and not in an English or American depository.

How is UNIT different from the usual “new currency”?

Unlike the high-profile but fragile attempts to create a common currency like the euro for the BRICS, UNIT is intended as a unit of account, not as full-fledged banknotes in the pockets of citizens.^{1 3} This means that it does not need to be immediately launched into retail circulation, tied to public deposits or credit programs - it is enough that central banks, state corporations, and large exporters can make payments with it.^{3 5}

This format reduces political risks: each BRICS country maintains its own monetary policy and does not transfer control over rates or issuance to a supranational central bank (unlike the history with the euro and the ECB).^{3 6} At the same time, UNIT allows for the creation of a common "language of calculations" where the exchange rate is tied to gold and a basket of currencies, rather than to the dollar - at least at the level of official formulas.

How it should work in trading

The scheme looks like this: two BRICS countries agree on the supply of, for example, oil or industrial equipment and fix the price in UNIT, not in dollars.^{1 3 5} Central banks or authorized financial institutions conduct settlements in digital UNIT through a special payment system — for example, BRICS Pay — with subsequent conversion into the national currencies of the parties, taking into account the peg of UNIT to gold and a currency basket.^{3 6 9}

This allows you to formally bypass dollar clearing centers, reduce dependence on SWIFT, and partially neutralize the risks of sanctions on specific dollar transactions.^{3 8} For countries that regularly face financial pressure from the West, this is already a political victory in itself: even if the trading volumes in UNIT are modest, the very fact of an alternative payment route becomes an important argument in diplomatic negotiations.

Is this really a threat to the dollar?

Western analysts cited by Reuters, Investopedia, and Bloomberg are very cautious in their assessments: yes, the BRICS may bite off a chunk of the dollar's share in international trade and reserves, but talking about the "death" of the dollar is ridiculous as long as it provides more than half of the world's reserves and a significant share in trade and debt markets.^{2 4 10} Even if the dollar's share in reserves drops from a nominal 60% to 50–45%, it will be painful for the American ego, but certainly not a catastrophe of the scale of "the end of the world, buy candles and bags of buckwheat."

In addition, the dollar is not just a currency, but an entire ecosystem: a giant US government bond market, deep and liquid financial markets, a legal system that, despite all claims, is trusted much more than the courts of the hypothetical Caracas or Beijing.^{2 4 10} BRICS can create an interesting calculation tool, but creating a full-fledged analogue of this entire economic and institutional backend in a few years is already from the fantasy section.

Political fissures within the BRICS

Even within the BRICS themselves, there is no complete unity on how far to go in the “anti-dollar” story. Investopedia reminds us that at previous summits, Russian and Chinese attempts to radicalize the discussion about an “alternative reserve currency” were met with a much more restrained position from India, Brazil, and South Africa, which are more interested in access to investment and technology than a currency revolution for the sake of revolution.^{3 6 9}

Some BRICS leaders are already openly saying that the goal is not to "drop the dollar," but to reduce its "weaponization" — that is, the ability of the US to use its currency as a tool of punishment through sanctions, asset freezing, or disconnection from the American financial system.^{3 6 8} UNIT, in this logic, is not a sword, but rather a shield: a way to have an emergency exit from a room where global finance is still controlled by Washington.

What does this mean for gold and crypto?

In the wake of discussions about UNIT and "dollar dilution," gold and Bitcoin are feeling at least not bad: investors who do not believe in the "eternal dollar" are buying them as a hedge against scenarios where the Fed will have to choose between inflation and recession, and politicians - between spending cuts and new debts.^{2 4 9} CCN directly links interest in the BRICS entity to the same sentiment that drives people into gold and crypto: distrust of fiat currencies and government promises that "everything is under control."^{1 2}

This is convenient for BRICS: the more gold becomes the "universal language of fear," the more logical the idea of ​​a unit of account partially tied to gold looks.^{3 6 9} But UNIT by itself will not cancel out fluctuations in the price of the metal: if gold rises in price, UNIT becomes more expensive relative to the dollar; if gold falls, an investor who thought he was hiding in a “gold-currency fortress” suddenly discovers that this fortress also has windows and doors.

UNIT Risks and Weaknesses

First, the issue of trust. For any unit of account to become a true competitor to the dollar, the market must be confident in the transparency of reserves, clear rules of issuance, and independence from the political whims of Kremlin or Beijing officials.^{3 6 10} So far, more is known about UNIT from presentations and public statements than from specific legal documents and regulatory frameworks.

Secondly, technical and cybersecurity: a digital, blockchain-based payment system that is supposed to serve dozens of countries with far from ideal cyber standards looks like a tempting target for hackers and anyone who wants to "test" a new financial toy for strength.^{3 9 10} Third, conflicts of interest: BRICS countries have different macroeconomic priorities, currency regimes, and degrees of capital account openness, which could make joint management of UNIT a constant field for bargaining and mutual accusations.

Where is Ukraine in this story?

For Ukraine, the story with UNIT and the “anti-dollar” rhetoric of the BRICS is not an abstract geopolitical drama, but a security issue. The BRICS bloc includes Russia, which is waging an open war against us, and China, which plays a key role in its economic stability; any mechanisms that make it easier for them to circumvent dollar sanctions potentially extend the resource of aggression.^{3 6 8} If a unit of account partially backed by gold allows Russia to continue trading in energy or weapons without fear of dollar blockades, this will directly affect the war against Ukraine.

On the other hand, multipolar financial mechanisms can create space for alternative coalitions that support Ukraine but do not want to be overly dependent on the whims of American policy.^{6 8} For us, the key is not so much the color of the banknote or the name of the unit of account, but the ability of Western allies to maintain control over critical financial levers of influence over Russia - and therefore, to closely monitor whether UNIT will turn into another loophole in the sanctions regime.

UNIT today: more geopolitics than economics

In the end, the picture looks like this: BRICS is promoting UNIT as a symbol that the world no longer wants to live in a unipolar dollar reality, while investors are secretly buying gold, crypto, and writing threads about the "end of the dollar empire."^{1 2 3} In the real sector, global trade, credit markets, and most large transactions are still denominated in dollars, and new instruments like UNIT are still more like an experiment and a political signal than a ready-made replacement.

The ability of BRICS to transform UNIT from a presentational slideshow into a truly mass settlement tool will depend on three things: the discipline of the participants themselves, the transparency of the rules of the game, and the extent to which Washington continues to “overdo” the weaponization of its own currency.^{3 6 10} As long as these three variables are far from stable, UNIT remains an important story for the “geopolitics and gold” section, but certainly not a reason to immediately exchange all hryvnias and dollars for an exotic supranational unit with a pretentious name.

Sources

1. CCN: "Dollar Debasement Fears and the BRICS Gold-Backed UNIT Currency Explained"
2. Investopedia: "Investor Anxiety Fuels Gold's Rise: Understanding the 'Debasement Trade'"
3. InvestingNews: "How Would a New BRICS Currency Affect the US Dollar?"
4. CNBC: materials on the "debasement trade", record prices for gold and Bitcoin
5. BTCC / AInvest / analytical reviews: announcement of the launch of UNIT, the formula of securing 40% gold and 60% a basket of BRICS currencies
6. The Daily Economy / GoldIRACompaniesCompared: Analysis on the Accelerated Dedollarization of BRICS and the Accumulation of Gold Reserves
7. Social Media Analysts (Sumit Kapoor, Kashif Raza): UNIT Concept Details (Digital Format, Blockchain, Launch Stages)
8. BRICS-focused reviews (Crux Investor, Nestmann, Gold & Silver Daily): explaining the role of gold in the BRICS strategy
9. Bloomberg / Reuters: materials on the real scale of the "debasement trade" and the dollar's share in world reserves
10. Analytical reviews on the risks of dedollarization and the consequences for the West's sanctions policy towards Russia and China