Escalating U.S. military costs in the Middle East are strengthening the case for a BRICS-led alternative to the U.S. dollar, according to financial analysts. The daily cost of the U.S.-Iran conflict is estimated between $800 million and $2 billion, increasing U.S. debt and bond yields. This fiscal pressure coincides with existing BRICS de-dollarization infrastructure, making a shift toward a gold-backed BRICS Unit a more immediate consideration for global markets.
The push for a BRICS Unit to challenge the U.S. dollar has gained urgency due to the high cost of the U.S.-Iran war. Congressional sources and analysts estimate the conflict costs the U.S. between $800 million and $2 billion per day, adding significant strain to the federal deficit.
Pentagon officials confirmed the opening week of Operation Epic Fury cost $6 billion. Penn Wharton’s Kent Smetters stated the early-stage cost could reach “$2 billion per day”, potentially settling near $800 million daily over time.
Financial markets are reacting to the rising deficit and war-driven inflation. The 30-year Treasury yield climbed near 4.90%, reflecting investor concerns about increased government borrowing.
“Long-end rates is a fiscal story and a government credibility story. It reflects expectations that Trump needs to spend money to fund the war and subsidize consumers for higher oil prices,” said Gang Hu, managing partner at Winshore Capital Partners. Portfolio manager Matt Eagan of Loomis, Sayles & Co. noted that wars and tariffs are both inflationary, adding to the deficit.
The practical infrastructure for de-dollarization is already operational among BRICS nations. Russia and China now settle roughly 90% of their bilateral trade in rubles and yuan, bypassing the dollar.
China’s CIPS payment system connects thousands of banks globally, while the mBridge platform processed over $55 billion in transactions by late 2025. “MBridge is now operational, and so is ZIPS, the cross border payment system, both of which are free from Swift intervention,” said Andy Schectman, president of Miles Franklin.
The proposed BRICS Unit is envisioned as 40% backed by gold and 60% by member currencies. This structure, combined with existing payment rails, presents a tangible alternative framework for international settlement.
