Feasibility of De-Dollarization in Iran’s Economy Based on Membership in BRICS

Feasibility of De-Dollarization in Iran’s Economy Based on Membership in BRICS
Article type: Research article
Author: Abolghasem Shahriari
Source: Iranian Journal of International Politics (Pazhuheshname-ye Irani-ye Siyasat-e Beynolmelal)
Year: 1403 (2024)
Volume: 12
Issue: 2 (No. 24)
Season: Spring and Summer

About the article
This article examines the feasibility of de-dollarization in Iran’s economy by leveraging the capacities associated with membership in BRICS, and seeks to show to what extent such membership can reduce Iran’s dependence on the US dollar. Taking into account the nature of BRICS—partly formed as a response to global financial crises and the dominance of the dollar—the author asks how Iran’s economic linkages with key BRICS members, especially China and Russia, can provide alternative channels for currency settlements.
The article explains that China and Russia have, in recent years, developed and strengthened their own independent financial messaging and payment systems as alternatives to SWIFT—systems that are now used within the framework of BRICS cooperation as well. Thus, Iran’s membership in BRICS could allow it to connect to these networks and ease the pressure of dollar-based sanctions. Using time-series data from 1996 to 2020, the study shows that deepening economic interactions with BRICS not only expands trade but also offers significant potential for reducing Iran’s dollar dependence.
However, the article stresses that de-dollarization does not mean abandoning the dollar entirely; rather, it means diversifying the currency basket, using local currencies, and employing new financial mechanisms to increase economic resilience. The findings indicate that Iran’s economic cooperation with BRICS members—particularly in banking, bilateral settlement systems, and alternative payment mechanisms—can provide a practical, gradual path toward greater economic autonomy and mitigating the effects of sanctions.