BRICS Launches Gold-Backed Currency: Understanding “The Unit” and How It Works

BRICS, a group of major emerging economies, originally Brazil, Russia, India, China, and South Africa, that has expanded to include Egypt, Ethiopia, Iran, Indonesia, and the United Arab Emirates, forming a significant bloc for global economic and political cooperation, representing over 40% of the world's population.

In the recent groundbreaking initiative, announced in December 2025, the BRICS nations have launched a working prototype of a revolutionary gold-backed digital currency called "The Unit." 

This represents a significant step toward de-dollarisation (to reduce reliance on the US dollar in trade, reserves, and financial transactions by using alternative currencies) and signals the BRIC's determination to create an alternative to the US dollar-dominated financial system. While this is currently a pilot project rather than an officially adopted policy, The Unit marks a watershed moment in the ongoing effort by emerging economies to assert financial independence and reshape global trade mechanisms.

What Is "The Unit"? Understanding the Basics

The Unit is a digital trading instrument designed to facilitate cross-border transactions among BRICS nations while reducing dependence on the US dollar and Western financial infrastructure. Unlike traditional fiat currencies or even most cryptocurrencies, The Unit is backed by real, tangible assets, a hybrid structure combining physical gold with a basket of major BRICS currencies.

The Core Structure of The Unit: 40% Gold, 60% Currency Basket

The Unit's backing mechanism is elegantly simple. The reserve basket comprises two distinct components:

1. Physical Gold Component (40%)

• The Unit is backed by actual gold stored in secure, diversified vaults across BRICS member nations.
• Gold is valued by weight rather than monetary price, providing inherent stability. For example, owning 1 gram of gold means your physical gold never changes, even if its dollar price rises or falls. The Unit works the same: backed by a fixed gold weight (0.9823g), its quantity stays constant, giving inherent stability despite dollar price fluctuations.
• This commodity-backed approach distinguishes, The Unit from traditional fiat currencies that lack tangible asset backing
• The weight-based valuation means that as global gold prices increase, the Unit's intrinsic value rises proportionally, creating a natural hedge against currency devaluation

2. Currency Basket Component (60%)

Five BRICS currencies participate equally in the basket, each comprising 12% of the total value:

• Brazilian Real
• Chinese Yuan (Renminbi)
• Indian Rupee
• Russian Ruble
• South African Rand

The equal weighting ensures that no single nation dominates the currency structure, addressing concerns about potential hegemony by China or any other member state. This balanced approach is crucial for gaining acceptance among all BRICS members and potential future participants.

The Pilot Project: Launch and Current Status

The Institute of Economic Strategy of the Russian Academy of Sciences (IRIAS) launched a pilot project on October 31, 2025, issuing 100 Units, each pegged to 1 gram of gold. This limited issuance was designed to test the technical and operational framework before any wider rollout.

By December 4, 2025, market movements reduced the reserve basket value from 100 grams of gold to 98.23 grams, adjusting each Unit’s value to 0.9823 grams of gold. This demonstrated how the mechanism responds to real market conditions.

Importantly, The Unit remains a pilot initiative by IRIAS and is not an official BRICS currency. BRICS leaders confirmed at the July 2025 Rio summit that no common currency is planned in the near term, focusing instead on local currency trade and BRICS Pay.

How "The Unit" Works: A Technical Deep Dive

Daily Valuation Mechanism

The Unit's value fluctuates daily based on real-time exchange rates in global foreign exchange markets. The calculation follows a straightforward formula:

Unit Value = (40% × Gold Weight) + (12% × Real) + (12% × Yuan) + (12% × Rupee) + (12% × Ruble) + (12% × Rand)

Each component is weighted equally for the currency basket, while the gold allocation comprises the stability anchor. Daily rebalancing ensures that The Unit's value continuously reflects market realities, preventing artificial distortions that could undermine confidence in the instrument.

Settlement and Transaction Process

While The Unit operates as a digital instrument, its transactional mechanics must adapt to the real-world constraints of converting between different national currencies. The envisioned settlement process would function as follows:

• Trade Agreement: Two BRICS entities agree to conduct trade and denominate the contract in Units
• Unit Issuance: Units are digitally created on a blockchain-based platform, representing claims on the reserve basket
• Settlement: At transaction conclusion, the parties' central banks settle by exchanging the actual gold and currency components
• Conversion: The receiving party can convert their Units into their national currency through established exchange mechanisms

This structure ensures that while The Unit provides a neutral medium of exchange, parties ultimately receive value in their preferred forms—whether that's gold or local currency.

Blockchain Technology Integration

The Unit operates on a blockchain network, similar to cryptocurrencies, but with crucial distinctions. Rather than being an unbacked digital token subject to market speculation, every Unit has documentary proof of backing in the reserve basket. The blockchain infrastructure enables:

• Transparent tracking of gold and currency holdings
• Smart contracts that automatically adjust weightings based on market data
• Real-time settlement capabilities without relying on traditional banking intermediaries
• Immutable records of all transactions
• Decentralized custody of reserve assets across multiple BRICS nations

Strategic Motivation: De-dollarization and Economic Independence (Reduced)

BRICS’ push for The Unit reflects growing dissatisfaction with dollar dominance. Reliance on the US dollar exposes member nations to sanctions, SWIFT restrictions, and financial isolation. US monetary tightening also weakens emerging market currencies, raises inflation, and increases external debt burdens.

Using a BRICS-based settlement system would cut currency conversion costs, ease trade among members, and reduce exposure to US policy shocks. Russia’s sanctions experience further highlighted the risks of dollar dependence.

The Unit aligns with broader de-dollarization efforts such as BRICS Pay, local-currency trade, CBDCs, the New Development Bank, and the Contingency Reserve Arrangement, all aimed at greater financial autonomy.

Reducing Dependence on the US Dollar 

The Unit represents BRICS’ long-term effort to reduce dependence on the US dollar and build an alternative settlement asset outside Western-controlled financial systems. It is structured as a composite instrument backed 40% by gold and 60% by an equal-weight basket of BRICS currencies, aiming to combine tangible value with diversification. Rather than replacing the dollar immediately, The Unit is designed to support gradual de-dollarization and financial autonomy.

Why Gold Backing Matters

Unlike fiat currencies that rely purely on government credibility, The Unit’s partial gold backing provides physical collateral and enhances trust. Gold historically preserves value over time, making The Unit more resilient to inflation than pure fiat systems. For BRICS economies that often face higher inflation and currency volatility, this feature adds stability and long-term value preservation.

Neutral and Non-Dominant Structure

The Unit is intentionally designed to avoid control by any single country. Equal weighting of BRICS currencies ensures no member enjoys the dominance the US holds in the dollar system. This neutrality reduces political risk, minimizes the threat of sanctions-based coercion, and builds confidence among member states and trading partners.

Diversification and Reduced Volatility

By combining five different currencies with gold, The Unit spreads exchange-rate risk across multiple economic cycles. Weakness in one currency can be offset by strength in another, while gold acts as a stabilizing anchor. This structure reduces volatility compared to holding a single emerging market currency.

Technological and Infrastructure Independence

Built on a decentralized, open-source blockchain framework, The Unit does not depend on Western financial infrastructure such as SWIFT. This allows BRICS nations to operate independently during geopolitical tensions and reinforces financial sovereignty.

How The Unit Differs From IMF Special Drawing Rights

While often compared to IMF Special Drawing Rights (SDRs), The Unit differs in critical ways. SDRs are controlled by the IMF, include Western currencies, lack commodity backing, and remain confined to the official sector. In contrast, The Unit is BRICS-governed, gold-backed, composed solely of emerging market currencies, and designed for broader trade and settlement use, without Western veto power.

Key Challenges to Adoption

Despite its strengths, The Unit faces major hurdles. Governance coordination among diverse BRICS economies is complex. Currency volatility remains a concern despite gold backing. Liquidity is currently negligible, with only 100 Units issued in the pilot phase. Regulatory, tax, and accounting treatment is still unclear, and some members remain wary of China’s growing influence due to its trade dominance. Additionally, decades of dollar-based network effects make transition difficult.

The Unit Within the Broader BRICS Strategy

The Unit is not a standalone solution but part of a broader de-dollarization framework. Near-term efforts focus on BRICS Pay, which enables cross-border payments in local currencies, and on expanding local-currency trade settlements. CBDCs and lending by the New Development Bank in non-dollar currencies further support this transition. The Unit functions as a potential long-term anchor rather than an immediate tool.

Realistic Timeline 

As of 2025, The Unit remains in pilot testing. The period from 2026 to 2027 is expected to focus on infrastructure development, regulation, and limited expansion. Any meaningful adoption before 2030 remains uncertain and highly dependent on political alignment, liquidity growth, and technical success.

Impact on the US Dollar

The Unit poses no immediate threat to dollar dominance. The dollar still controls the majority of global reserves, trade settlement, and payment flows. However, over time, increased BRICS trade in alternative systems could slowly reduce dollar demand and contribute to a more multipolar financial order.

Conclusion: Evolution, Not Revolution

The Unit should be viewed as a strategic milestone rather than a financial panacea. It signals BRICS’ determination to build credible alternatives to the Western-dominated system, backed by real assets and independent infrastructure. While challenges remain substantial, The Unit represents a meaningful step toward long-term financial multipolarism, deserving attention and careful monitoring rather than inflated expectations.