Author: Simon Eberhart
On February 26th, 2022, the United States and a broad coalition of allies froze roughly $300 billion in Russian central bank assets overnight. This move sent two massive signals throughout the global financial markets: first, that the United States isn’t afraid to wage financial warfare in response to geopolitical aggression; and second, that it has the ability to cripple a global power with just the stroke of a pen.
This wasn’t some shadowy financial trick – it was the weaponization of rules Russia had helped write 78 years earlier.
Following the conclusion of World War II, the United States emerged as the world’s sole economic superpower – equipped with a booming economy and the largest gold reserves in history, all while Europe and Asia lay in ruins. The world needed to be rebuilt, and that required an ironclad financial system which was both stable and secure. Naturally, the United States was the ideal chaperone for this new post-war economy.
In July of 1944, representatives from across the world traveled to the small town of Bretton Woods, New Hampshire. There, in a conference which would shape the global economy for decades, 44 Allied nations agreed to establish a new international monetary system, all built upon the solid foundation of the U.S. Dollar. The agreement pegged each nation’s currency against gold, using the U.S. Dollar as the middleman that could be converted to gold at a fixed price. In effect, the U.S. Dollar became the world’s monetary anchor.
As the global economy grew in the decades that followed, so did the influence of the Dollar. However, the gold standard eventually became unsustainable. When conversion from cash to bullion -a term meaning gold before it is coined- was permanently suspended in 1971, the Dollar suddenly lost all concrete value. Its place on the economic throne was suddenly vulnerable – the United States needed a new foundation to support its currency’s global dominance.
In the mid 70’s, the United States signed a myriad of agreements with Saudi Arabia and other OPEC nations to sell all oil exports exclusively in Dollars in return for military support and extensive weapons deals. Going forward, any country wanting to buy oil had to first obtain U.S. Dollars. Demand soared, and has stayed extraordinarily high over the past fifty years. Even without gold, the Dollar has remained the perennial foundation of international trade, now backed by the most important commodity on Earth: oil.
But in the aftermath of the 2022 Russian sanctions, cracks in the bedrock are starting to show. For countries like Brazil, Russia, India, China, and South Africa –colloquially known as BRICS–, the U.S. Dollar has started to feel less like a mostly neutral asset and more like an economic sleeper agent, ready to strike at the slightest whim. The decision to freeze Russian assets was the howl which alerted the pack, and the other BRICS nations now see the writing on the wall.
Naturally, a new movement has quietly gained momentum: to reduce dependency on the dollar and find alternatives that cant be frozen, censored, or easily manipulated.
In 2023, 14 months after the Russian asset freeze, Brazil proposed the creation of a shared BRICS currency to bypass the U.S. Dollar in international trade. The proposal wasn’t for a new national currency for the masses like the Rupee and the Yuan, but for a politically neutral trading denomination – much like the dollar had once been in the international market.
The proposed currency made headlines but never materialized. Internal divisions, vastly different economies, and competing interests made such a unifying currency not entirely practical. However, the sentiment among BRICS remained: If not an actual currency, some sort of tangible “backup asset” was needed for future geopolitical tensions with the United States. They needed something proven, simple and mostly reliable: gold.
It isn’t flashy or modern but gold is perhaps the most tested and trusted asset in history. It can’t be sanctioned by Washington, distilled and diluted, or frozen in a Western bank vault – at least, not if it’s stored at home.
What has followed in the last few years is the largest “gold rush” since the 1950’s – not in the traditional sense, but instead among central banks. In 2022 alone, nations bought over 1,000 tonnes of gold, and its price has surged by an astounding 75% since. In 2024, gold reserves officially overtook the Euro to become the second most held reserve asset in the world, behind only the U.S. Dollar. Simultaneously, many countries have begun actively engaging in gold repatriation – physically removing their gold reserves from foreign financial hubs like New York City and London, and bringing their bullion home. The tides are shifting, and gold is on the rise, but the Dollar’s decades of dominance have created near bulletproof financial infrastructure – that infrastructure just isn’t really there yet for gold.
The real strength of the Dollar isn’t the strength of the United States or the ease of its conversion – it’s simply how ubiquitous the dollar is. The world has run on dollars for more than 80 years, and frankly, inertia is a powerful force. However, BRICS knows this well; they’re not just hoarding gold – they’re building the scaffolding of an entirely new Bretton Woods. Russia has proposed the Moscow World Standard to rival the dominance of Western bullion markets; China is growing the Shanghai Gold Exchange rapidly; India has signed trade deals with oil exporters to allow payments in gold bullion; even some OPEC nations have flirted with non-dollar oil trading. While the Dollar still sits atop the financial throne, the bricks beneath it –pun intended– are starting to shift.
Then again, it is important to clarify that this isn’t the emergence of a new Euro. The failure of Brazil’s plan for a universal BRICS currency in 2023 made that crystal clear. China’s economic needs are not the same as Indias, and Russia’s geopolitical baggage makes total economic unification pretty unappealing. But the push towards gold isn’t just ideological or political, it’s also practical. In the wake of COVID-19 driven inflation and rising global instability, gold’s role as a hedge has only grown. Central banks aren’t just stockpiling bullion to dodge American influence – they are bracing for volatility as well. So what’s taking shape isn’t just merely an attempt to escape foreign meddling, it’s an attempt to find a financial lifeboat. Apolitical, tangible, independent, and inflation resistant. In other words, essentially everything the dollar no longer is.
For decades, the United States has enjoyed extraordinary advantages: cheaper borrowing costs, mostly unmatched control over global finance, and a special seat at every negotiating table – all thanks to the Dollar’s dominance. But this power has bred complacency – and lately, overreach. Russia’s asset freeze opened a door which can never be closed; trust in the current financial system was permanently undermined. It may have showcased pretty unrivaled economic power, but it sent echoes throughout the global markets. And the world was listening.
There’s no BRICS super-dollar coming to crush the economy; the gold standard isn’t making a sudden return. However, without a doubt there is a slowly growing “backup currency” cracking the storied foundation of the global markets which is the Dollar. Whether this gold based movement succeeds or fades, one thing is clear: the post-war financial order is no longer ironclad. What seemed infallible is being quietly sidestepped in the shadows – not by a revolutionary new currency, but the oldest store of value humanity has ever known: gold.
Works Cited
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Chen, James. “Petrodollars: Definition, History, Uses.” Investopedia, 17 July 2024, https://www.investopedia.com/terms/p/petrodollars.asp .
“Exclusive: Russia Could Concede $300 Billion in Frozen Assets as Part of Ukraine War Settlement, Sources Say.” Reuters, 21 Feb. 2025, https://www.reuters.com/world/europe/russia-could-concede-300-bln-frozen-assets-part-ukraine-war-settlement-sources-2025-02-21/ .
Ghizoni, Sandra. “Creation of the Bretton Woods System.” Federal Reserve History, n.d., https://www.federalreservehistory.org/essays/bretton-woods-created .
Storbeck, Olaf, and Leslie Hook. “Gold Overtakes Euro as Global Reserve Asset, ECB Says.” Financial Times, 11 June 2025.
Swint, Brian. “China, Russia, Brazil Want to Demote the Dollar. Gold Is the Answer.” Barron’s, 25 Oct. 2024, https://www.barrons.com/articles/dollar-gold-china-russia-brazil-brics-3b0ce1a4 .