Iran’s push for a stronger BRICS financial framework has brought the question of reducing dependence on the US dollar back into focus as leaders of the expanded grouping gather in New Delhi for the 2026 BRICS Summit.
Iran has a strong interest in developing alternative channels for international trade because its economy has been under heavy pressure from US sanctions and restrictions on access to the global financial system. Iranian officials have repeatedly highlighted the importance of maintaining trade relationships and finding ways to reduce the impact of sanctions. Recent economic pressure has also affected Iran’s oil exports and access to foreign currency.
For Tehran, greater use of local currencies and independent payment mechanisms within BRICS could make it easier to conduct trade without relying entirely on dollar based transactions or Western dominated financial networks. This does not necessarily mean that Iran or BRICS is preparing to eliminate the US dollar immediately. Instead, the broader objective is to create additional payment options and reduce exposure to a financial system in which sanctions can restrict access to international transactions.
BRICS has already been discussing ways to improve cross border payments and increase the use of national currencies. The grouping has expanded considerably and now includes Brazil, Russia, India, China, South Africa, Egypt, Ethiopia, Indonesia, Iran, Saudi Arabia and the United Arab Emirates. The different economic structures and political interests of these countries, however, make the creation of a single alternative currency or unified financial system difficult.
One of the most significant developments ahead of the New Delhi summit is India’s proposal to explore greater interoperability between central bank digital currencies, or CBDCs. Reuters reported that India is advocating the integration of CBDCs among BRICS countries to facilitate faster and more efficient cross border payments. The proposal builds on earlier BRICS discussions about improving payment system interoperability.
A CBDC is a digital form of a country’s sovereign currency issued or controlled by its central bank. If different countries can connect their CBDC systems, businesses and financial institutions could potentially settle international transactions more directly. Such a system could reduce the number of intermediaries involved in some cross border payments and potentially lower transaction costs.
For Iran, this kind of infrastructure could have strategic importance. The country faces restrictions on access to international banking channels because of US sanctions. Alternative payment systems could provide additional routes for trade with countries willing to maintain economic relations with Tehran.
The issue is particularly important for oil markets. The US dollar has historically played a central role in international oil trading. Any meaningful increase in the use of local currencies or alternative payment systems for energy transactions could gradually diversify the currencies used in global oil trade.
However, a major shift away from the dollar would not happen quickly. The dollar remains deeply embedded in international trade, banking, commodity markets and global financial reserves. BRICS countries also have different currencies, financial regulations and economic priorities. Experts have therefore cautioned that reducing dollar dependence is more realistic in the short term than completely replacing the dollar.
The political differences within BRICS are another major challenge. India, China, Russia, Iran, Saudi Arabia and the UAE have different strategic interests and relationships with the United States and other Western countries. These differences make it difficult for the bloc to adopt a single aggressive approach against the dollar.
India has also made clear that its CBDC proposal is aimed primarily at improving cross border payments rather than replacing the US dollar as the world's reserve currency. Reuters reported that India sees the initiative as a way to make international transactions easier and faster, rather than as an immediate attempt to create a replacement for the dollar.
For global oil markets, the consequences could therefore be gradual rather than immediate. If BRICS members increasingly settle oil and other commodity transactions using local currencies, digital currencies or alternative payment mechanisms, the international financial system could become more diversified.
Iran’s interest is also linked to its need to maintain oil revenues and international trade under severe economic pressure. Reuters recently reported that US sanctions and restrictions have significantly reduced Iran’s oil exports, increasing the importance of alternative trading channels for Tehran.
The 2026 BRICS Summit in New Delhi therefore carries significance beyond traditional diplomatic discussions. Leaders are dealing with questions involving trade, payments, energy security and the future structure of the international financial system. The bloc's ability to move from proposals to practical financial cooperation will determine how much influence BRICS can eventually have on global trade.
For now, the most likely outcome is not an immediate end to dollar based oil trading. Instead, BRICS countries may gradually develop more payment options, increase local currency settlements and improve digital payment connectivity. If these systems become widely adopted, they could reduce the dollar's role in some areas of international commerce over time.
For Iran, such a development could provide greater flexibility in conducting trade and reduce its vulnerability to financial sanctions. For the global oil market, however, any major change would depend on whether other large energy producers and consumers are willing and able to use alternative currencies and payment systems on a sustained basis.