As India and China Advance Alternative Reserve Currencies, the UAE Becomes the Key Catalyst.
BRICS+ is often derisively framed (and legitimately threatened) as attempting to replace the U.S. dollar-centric financial order.
Or ridiculed for failing to do so.
Sympathizers are not immune from such threats, either.
That framing, however, misses the bloc’s more consequential development of financial optionality, or the addition of multiple economic and financial pathways for BRICS+ allies that have historically been subordinated to and subdued by the USD (and subsequently by both the IMF and World Bank) to conduct business and achieve economic growth while mitigating economic disruption or monetary collapse.
In short, optionality does not abandon the USD but instead challenges the currency’s monopoly by providing the choice of regional currencies for settlements in investment, FX markets, and trade. China, inarguably the central force in BRICS+, recently escalated the credibility of a seismic shift in economic and monetary policy by demanding the yuan (renminbi or RMB) to become a recognized global reserve currency.
Whatever dismissiveness toward the expansion and threat of BRICS+ diminished further as U.S. Treasury Secretary Scott Bessent confirmed China’s bold move to challenge the USD with a gold-backed digital currency. Just days earlier, India rolled out its own initiative develop a BRICS-based cryptocurrency in a spirit similar to its Chinese peer.
BRICS Momentum Continues Unignored
A similar initiative by the UAE would complete a formidable trinity of resource- and financially rich nation states that ostensibly would weaken the USD’s market capture of all things trade, investment, and foreign currency.
Such headlines might not be far from printing.
The UAE: Making Optionality Operational
The UAE plays a larger role in BRICS+ than is often recognized, not by challenging the existing financial order, but by making alternatives workable. Its role is practical, acting as a financial connector: allowing trade, payments, and capital to move across currency systems with limited disruption. This protects the UAE from capital flight while allowing it to host alternative settlement and financing channels without signaling instability.
This also gives credibility to reserve currency experiments led by India and China without requiring a break from the dollar system.
BRICS about Economic Power, Not Military Leverage
These roles matter most when reserve diversification is treated as a balance sheet issue rather than a political one. The UAE’s capacity renders new arrangements feasible in tandem with the BRICS-led New Development Bank (NBD) that plays a central role by reshaping development finance before crises emerge via infrastructure and industry-based projects settled in local currencies. This reduces exposure to exchange rate swings, limits reserve drawdowns during periods of economic volatility, and lowers dependence on emergency dollar borrowing from the International Monetary Fund (IMF).
The India-UAE corridor illustrates this clearly. Settlement and payment frameworks support high volume flows in trade, services, and remittances with fewer forced dollar conversions. Expanded rupee settlement in trade, remittances, and development finance reduces India’s recurring dollar demand and limits reserve drawdowns during global tightening. Swap lines and buffers allow these flows to continue during stress.
The China-UAE corridor follows similar logic by linking to expanding renminbi settlement systems through globally credible UAE banks. Also, for China, wider use of the renminbi in trade and project finance supports gradual internationalization without full capital account openness. Swap arrangements and offshore clearing allow renminbi liquidity to circulate during periods of stress while remaining aligned with domestic policy control.
China and the Folly of America’s Strategic Drift
In both cases, the UAE does not rely on these settlement alternatives for its own stability. That independence gives it credibility as a neutral host. For many developing countries, however, including those in BRICS+, reliance on the dollar has been a condition of participation rather than a choice.
The UAE’s influence comes from making use of the dollar optional rather than mandatory. By expanding non-USD settlement in specific trade corridors with India and China, hosting alternative clearing systems, and supporting NDB lending in local currencies that reduces future FX risk, the UAE limits the U.S. dollar’s role as a single chokepoint. This does not remove dollar dominance, but it changes how power via sanctions is applied.
Why this Matters
As BRICS+ expands, this financial architecture becomes more important. Many new members are developing economies with limited foreign exchange, heavy import dependence, and exposure to volatile capital flows. It provides the financial flexibility that advanced economies built over time.
Several dynamics are likely to shape the next decade. Financial hubs such as the UAE act as neutral intermediaries for trade, payments, and capital across currency systems. The NDB finances infrastructure in ways that reduce currency mismatch and crisis driven borrowing. Currency swap arrangements and liquidity buffers reduce short term funding stress. Swaps allow central banks to exchange currencies during pressure, while buffers refer to reserves and pre-arranged funding that stabilize markets. The IMF remains a dollar-based backstop but is used less often, demoted behind regional and local institutions and thereby reducing IMF’s leverage.
Within this structure, the currency initiatives of India and China become practical rather than symbolic.
Investment Opportunities
TradersQue is presently not invested in nor trading any of the following investment instruments. As always, the following profiles of various instruments across the UAE, India, and China represent educational information only, not investment advice. This list is not exhaustive and pertains only to the focus of this article.
UAE
iShares MSCI UAE ETF (NYSE: UAE)
This ETF provides the cleanest U.S. listed exposure to UAE equities. It is heavily weighted toward banks and infrastructure linked firms that benefit from the UAE’s role as a settlement and liquidity hub for India and China related trade flows. Emphases: Financial intermediation, multi-currency banking, trade finance
Emirates NBD PJSC (DFM: EMIRATESNBD or ENBD)
Available mainly via UAE’s DFM market (available through Interactive Brokers IBKR platform), Emirates NBD is of the UAE’s largest banks, Emirates NBD exposure to cross border settlement and trade finance makes it a direct beneficiary of rupee and renminbi settlement corridors routed through the UAE. Emphases: Multi-currency clearing, correspondent banking, trade finance.
INDIA
iShares MSCI India ETF (NYSE: INDA)
This ETF provides broad exposure to Indian banks and industrial firms that benefit from rupee settlement, reduced FX mismatch, and lower dependence on dollar funding. Emphases: Domestic banking depth, infrastructure financing, balance sheet resilience.
HDFC Bank ADR (NYSE: HDB)
This ADR provides access to India’s largest private bank and a key node in domestic settlement and cross border flows. Benefits from stable rupee funding and lower FX stress for clients. Emphases: Trade finance, remittances, rupee liquidity.
ICICI Bank ADR (NYSE: IBN)
This ADR is more internationally exposed than peers and positioned to benefit from swap lines and non-USD settlement frameworks that reduce dollar liquidity stress. Emphases: Cross border banking, offshore funding, swap usage.
WisdomTree India Earnings Fund (NYSE: EPI)
This particular fund focuses on earnings rather than market capitalization, favoring firms less dependent on external funding and more aligned with local currency balance sheets. Emphases: Domestic currency cash flows.
CHINA
iShares MSCI China ETF (NASDAQ: MCHI)
This ETF provides broad exposure to Chinese firms that benefit from wider RMB settlement and trade finance usage. Emphases: System-wide renminbi usage, financial and industrial depth.
Bank of China ADR (OTC: BACHY)
A core global RMB clearing bank, the Bank of China’s ADR is directly involved in trade settlement and swap related liquidity provision. Emphases: Offshore renminbi clearing, crossborder settlement.
Industrial & Commercial Bank of China ADR (OTC: IDCBY)
Supporting large scale infrastructure and policy-aligned lending tied to RMB settlement networks is the Industrial & Commercial Bank of China’s ADR. Emphases: Development finance, RMB liquidity provision.
WisdomTree Chinese Yuan Strategy Fund (NYSE: CYB)
This fund provides RMB exposure without equity risk. Closely tied to settlement and swap dynamics rather than trade volumes. Emphases: Renminbi exposure via forwards.
Again, TradersQue is not currently invested in or trading any of the instruments discussed above. The profiles provided across the UAE, India, and China are intended solely for educational purposes and should not be interpreted as investment advice. This selection is limited to the specific scope of this article and does not represent an exhaustive survey of available opportunities.
Additional Coverage
Additional social media coverage can be found on the author’s X platform via the keyword #BRICS.
