Tehran says it is preparing to join the BRICS-backed New Development Bank, potentially expanding its access to development finance as war and sanctions constrain Iran’s economy — while testing how effectively emerging-market institutions can broaden financing options for countries facing international restrictions.
Iran says it is moving toward membership in the New Development Bank (NDB), the multilateral lender established by the original BRICS countries, as Tehran seeks deeper economic ties with emerging markets amid continuing conflict and extensive sanctions.
Iranian Central Bank Governor Abdolnaser Hemmati said this week that the country would “soon” join the NDB, ahead of meetings of BRICS finance ministers and central bank governors in India. Iran joined BRICS in 2024, but membership in the political grouping does not automatically confer membership in its development bank.
The NDB has not confirmed Iran’s accession. The bank told Reuters it could not confirm information regarding Iranian membership, and its current membership list does not include Iran among either its 10 members or its prospective members.
For now, Iran’s entry should therefore be viewed as a stated intention rather than a completed institutional development.
A Potential Financial Opening — With Significant Limits
For Tehran, eventual NDB membership could create another avenue for financing infrastructure and sustainable-development projects at a time when sanctions restrict its access to much of the international financial system.
Created in 2015 by Brazil, Russia, India, China and South Africa, the NDB was designed to mobilize resources for infrastructure and sustainable development in emerging markets and developing economies. It has since expanded to include Bangladesh, the United Arab Emirates, Egypt, Algeria and, most recently, Uzbekistan.
But membership would neither guarantee Iran financing nor insulate transactions from sanctions and international capital-market constraints.
The NDB itself remains closely connected to global markets. In July, the bank raised $1.75 billion through a dollar-denominated bond in international capital markets, attracting more than $3.2 billion in orders from investors across Asia-Pacific, Europe, the Middle East, Africa and the Americas.
That dependence matters. Even as BRICS members seek greater financial flexibility, the bloc’s principal development bank still relies in part on dollar funding and international investors.
The NDB’s response to sanctions on Russia after its 2022 invasion of Ukraine demonstrated the same tension. The bank suspended new transactions in Russia at the time as it sought to preserve access to international financial markets.
That precedent does not determine how the NDB would treat Iran. But it illustrates the central challenge: expanding financing options for emerging economies while remaining integrated into the global markets where sanctions are enforced.
BRICS Is Broadening Its Financial Infrastructure
Iran’s push for NDB membership comes as BRICS governments explore a wider range of mechanisms to facilitate trade, payments and investment among member economies.
This week, Reserve Bank of India Governor Sanjay Malhotra said BRICS countries were discussing linking domestic fast-payment systems and potentially their central bank digital currencies to improve cross-border payments and reduce transaction costs. The proposals remain at an early stage.
India has separately promoted greater use of national currencies in international trade, while Hemmati said Iran is pursuing bilateral and trilateral monetary arrangements with other BRICS countries and wants members to expand transactions using national currencies.
Taken together, these efforts point toward financial diversification rather than the imminent creation of a parallel global financial system.
Jim O’Neill, the economist who coined the BRIC acronym, told Reuters last month that technological developments have made alternatives to existing dollar-based payment arrangements more plausible than he once believed. But he also argued that BRICS has struggled to translate its growing political weight into substantial collective policy achievements beyond establishing the NDB.
His assessment captures the broader tension facing the bloc: growing ambition, but still-limited institutional capacity.
Dollar Dominance Remains Intact
The initiatives under consideration across BRICS are often discussed as part of a wider trend toward “de-dollarization.” But the term can overstate what is actually taking place.
Most of the measures being discussed involve diversification — expanding local-currency settlement, linking national payment systems and developing additional sources of financing.
They do not yet constitute a replacement for the dollar-centered international monetary system.
The dollar remains dominant in global reserves, international finance and trade, even as emerging economies explore mechanisms that could reduce reliance on it in specific transactions.
There are also significant differences among BRICS members over how far such efforts should go. The expanded grouping includes countries with different economic models, geopolitical relationships and strategic priorities.
India, Brazil and the UAE, for example, maintain substantial financial and commercial relationships with the United States and Europe even as they participate in efforts to strengthen BRICS institutions.
That makes it more accurate to view the emerging landscape as increasingly multipolar rather than divided into competing financial blocs.
Iran Could Test the Limits of BRICS Finance
Iran therefore presents an unusually consequential test.
For Tehran, NDB membership could expand its relationships with emerging-market lenders and reinforce its stated efforts to conduct more international transactions outside traditional dollar channels.
For the NDB, however, the calculation is more complicated.
Iran remains subject to extensive U.S. and international sanctions. Providing substantial financing could therefore require the bank to navigate those restrictions while protecting its credit standing and relationships with international investors.
Its own funding model shows why that matters. In the bank’s July $1.75 billion bond issuance, banks purchased nearly half the offering, while central banks and official institutions accounted for another 37%.
Iran’s prospective membership could therefore reveal how much practical financial flexibility BRICS institutions can provide to sanctioned member states without compromising their own access to global capital.
Strategic Outlook
Iran joining the NDB would be symbolically significant, but its immediate economic impact should not be overstated.
The accession itself remains unconfirmed, membership does not guarantee project financing, and the bank continues to operate extensively within international capital markets, including through dollar-denominated borrowing.
The more consequential question is what happens afterward.
If Iran ultimately joins and secures meaningful NDB financing while expanding local-currency trade and alternative payment arrangements, it would provide evidence that BRICS institutions are becoming more useful financial channels for countries facing geopolitical and sanctions-related constraints.
If sanctions and capital-market considerations sharply limit what the bank can provide, Iran would instead demonstrate the continuing reach of the existing international financial system.
Either outcome would make Tehran an important test case for a broader shift already underway: the extent to which emerging-market institutions can provide additional financing and payment options alongside — rather than necessarily in place of — the existing global financial system.
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