The global de-dollarization trend has reached a critical point right now, with JPMorgan Chase reporting that US dollar reserves have fallen below 60 percent for the first time in two decades. As 71 countries de-dollarize their holdings, central banks are shifting toward gold at unprecedented rates, and this raises serious concerns about the future of American economic dominance.
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71 Countries De-Dollarize While Gold and JPMorgan Warnings Rise
JPMorgan Issues Warning on Accelerating Shift
The global de-dollarization trend shows up clearly in the numbers at the time of writing. Total holdings of dollar-denominated securities by central banks fell by $59 billion in 2024, and this decline has been accelerating. As of last year’s end, dollars made up just 57.8 percent of global reserves—the lowest since 1994 and a 7.3 percent decline over the past decade. In 2002, dollars accounted for about 72 percent of total reserves, so the shift has been substantial.
JPMorgan’s analysis pointed out something interesting about the global de-dollarization trend and gold. The bank noted that emerging market central bank gold holdings remain relatively low at 9 percent, but gold reserves have more than doubled from 4 percent just 10 years ago. The disadvantages of de-dollarization for the US are becoming more apparent as this trend continues.
JPMorgan Chase head of rates strategy Jay Barry had this to say:
“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.”
Gold Purchases Surge Amid Global Shift
Central banks now hold approximately 36,000 metric tons of gold, and they’ve been adding more than 1,000 metric tons annually over the past three years. This buying pace is more than double the average of the previous decade. With gold prices above $3,500 per ounce right now, central bank gold holdings have reached around $4.5 trillion, which significantly surpasses their $3.5 trillion in US Treasuries.
Poland led as the biggest buyer in 2024, adding 90 tons to reach 448 tons, which is about 17 percent of its total reserves. Türkiye added approximately 75 tons during the same year. The US, Germany, Italy, France and Russia collectively hold more than 18,700 metric tons of gold. The global de-dollarization trend is being reflected directly in these purchases, as countries seek alternatives to dollar-based assets and also want to protect themselves from political risks.
Disadvantages of De-Dollarization Mount for US Economy
The disadvantages of de-dollarization are mounting for Washington. Foreign Treasury holdings dropped to 30 percent in early 2025, down from 50 percent during the Great Recession, and this shift has been continuous for 15 years now. Interest on the national debt hit $144.6 billion in June alone, bringing yearly costs to $921 billion—up 6 percent over the same period in 2024.
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What’s Driving Countries Away from the Dollar
The movement where 71 countries de-dollarize accelerated after the US froze $300 billion in Russian reserves in 2022. According to the World Gold Council, 76 percent of central banks plan to increase their gold holdings over the next five years, while 75 percent aim to reduce their exposure to dollar-denominated assets. China’s People’s Bank now holds 2,300.4 metric tons, and India has been steadily restructuring its portfolio, increasing its allocation to gold while trimming its exposure to US Treasury bills.
The disadvantages of de-dollarization also show up in the bond market. The federal government is already struggling to cope with increased borrowing costs due to rising yields and tepid demand for Treasuries. As fewer dollars are needed globally, they’ll begin returning to the US, creating a dollar glut and also increasing inflationary pressure domestically. The global de-dollarization trend presents serious risks as the world’s reserve currency loses its grip on international finance, and the situation continues to evolve.