- The daily cost of the US-Iran conflict, estimated between $800 million and $2 billion, is straining the US deficit and fueling bond market concerns.
- BRICS nations have built operational de-dollarization infrastructure like the mBridge platform and the proposed Gold-backed BRICS Unit for trade settlement.
- Long-term US Treasury yields are rising as markets price in war-driven inflation and deficit spending, with one analyst noting demand may only return when yields are “north of 5%”.
Geopolitical and financial pressures are accelerating the push for a BRICS-led alternative to the US dollar in early 2026. Consequently, the staggering cost of the US-Iran war, confirmed by Pentagon officials to be $6 billion in its first week, is a central catalyst. This massive expenditure is landing on a federal deficit already under serious strain.
Long-dated US bond yields have climbed in response, with the 30-year Treasury nearing 4.90%. Matt Eagan of Loomis, Sayles & Co. connected the fiscal dots directly. He stated that war and tariffs are inflationary, adding “to the deficit” at a time of high Treasury supply.
However, the infrastructure for a BRICS Unit replacement is already operational. The bloc’s mBridge platform processed over $55 billion by late 2025, facilitating instant cross-border payments. Furthermore, Russia and China now settle around 90% of their bilateral trade in national currencies.
Meanwhile, analyst Gang Hu of Winshore Capital Partners framed the bond market move as a “fiscal story and a government credibility story.” Every billion in war spending narrows the dollar’s perceived advantage. Therefore, the conditions for a meaningful shift in global settlement preferences have rarely looked more favorable.
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