- The share of U.S. dollar reserves worldwide has dropped below 60% for the first time in two decades.
- A total of 71 countries are actively reducing their holdings in U.S. dollars and increasing their Gold reserves.
- JPMorgan Chase reports central banks’ gold holdings now far exceed their U.S. Treasury holdings, reflecting a significant shift.
- The decline in dollar reserves has led to rising interest on U.S. national debt and increased borrowing costs.
- Many central banks are moving away from the U.S. dollar to guard against political risks and diversify portfolios.
Central banks in 71 countries have reduced their U.S. dollar reserves to less than 60% of global holdings, according to JPMorgan Chase. This marks the lowest level for the dollar in over 20 years as central banks shift assets into gold to diversify from dollar-based investments.
Figures from JPMorgan show that foreign holdings of dollar-denominated assets dropped by $59 billion in 2024. By the end of 2023, the dollar’s share was just 57.8% of global reserves, compared to 72% in 2002. Over the last decade, central banks increased their gold holdings from 4% to 9% of total reserves.
“Although foreign demand has not kept pace with the growth of the Treasury market for more than a decade, we must consider what more aggressive action could mean. Japan is the largest foreign creditor and alone holds more than $1.1 trillion in Treasuries, or nearly 4 percent of the market. Accordingly, any significant foreign selling would be impactful, driving yields higher,” Jay Barry, head of rates strategy at JPMorgan Chase, said.
Central banks have added more than 1,000 metric tons of gold each year for the past three years. Gold holdings now total about 36,000 metric tons—worth $4.5 trillion at current prices—outpacing their $3.5 trillion in U.S. Treasuries. Poland and Türkiye led 2024 purchases, with Poland adding 90 tons and Türkiye 75 tons of gold. The U.S., Germany, Italy, France, and Russia collectively hold over 18,700 metric tons of gold.
Foreign holdings of U.S. Treasuries fell to 30% in early 2025 from 50% in 2008. The U.S spent $144.6 billion in interest payments in June alone, reaching an annual total of $921 billion, a 6% increase from the previous year.
The global trend gained momentum after the U.S. froze $300 billion in Russian reserves in 2022. The World Gold Council reports that 76% of central banks intend to raise their gold allocations, while 75% plan to decrease U.S. dollar-denominated holdings. This shift stresses the challenges the U.S. faces as the world’s reliance on the dollar continues to decrease.
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