The dollar’s share of central-bank reserves fell from around 70% at the start of the millennium to around 56% after 25 years, according to International Monetary Fund data. The dollar has also lost around 10% against major currencies since the start of the current year, amid shifts in reserve and international trade policies.
Although the dollar remains the dominant currency in foreign-exchange reserves by a wide margin over other major safe-haven currencies, its share has fallen from its 2000 level as some countries increase their gold holdings and add other currencies to their reserves.
Changing composition of global reserves
The dollar accounted for 56% of foreign-exchange reserves in the second quarter of the current year, compared with around 21% for the euro and 2% for the Chinese yuan, while the share of the remaining currencies rose to more than 20%.
The dollar is facing pressure from its decline against foreign currencies and safe-haven assets, especially gold, as well as from the shrinking space occupied by the US currency in central-bank reserves. This is creating room for other currencies, led by the Chinese yuan, to expand, although the gap between the yuan and the dollar remains wide in the international monetary system.
US President Donald Trump has promoted his role in defending the dollar’s global standing, threatening to impose tariffs of 100% on any country that moves to abandon it. His threats have focused on BRICS members and the group’s plans to launch an alternative medium of exchange.
National currencies and the international financial infrastructure
Pyotr Fradkov, chairman of Russia’s PSB Bank, said in mid-August last year that abandoning the dollar in international payments would not fully resolve the problem, and that switching to other currencies did not necessarily mean ending dependence on external financial infrastructure.
Fradkov said Russia was working to increase the use of national currencies in its foreign trade, but reliance on international infrastructure would remain as long as payments were linked to external entities that controlled transfers and liquidity.
Fradkov warned against viewing stablecoins as a final solution, describing them as a possible temporary tool for adapting to a rapidly changing world. Transactions involving stablecoins totaled around 33 trillion dollars in 2025, up 72% year on year, compared with 16.7 trillion dollars in Visa transactions and 10.6 trillion dollars in Mastercard transactions during the same year.
He noted that using stablecoins did not necessarily mean moving away from the dollar, as around 98% of their value is linked to it. The number of countries studying or developing central-bank digital currencies rose from 35 in May 2020 to 146 currently, alongside the development of China’s CIPS system and efforts by countries including Indonesia and Brazil to develop independent policies for international trade.
Dollar falls as precious metals rise
Trump’s comments about the dollar’s decline in late January last year triggered reactions in global markets. The dollar fell 1.3% against a basket of other major currencies, hitting its lowest level in 4 years, while its losses since the start of the current year stood at 2.6% at that time.
By contrast, demand for safe havens increased, pushing the price of gold above 5200 dollars an ounce, while silver reached 112 dollars an ounce.
“The strength of gold and the weakness of the dollar highlight doubts about Trump’s chaotic and ill-considered policies.”
The pace of change in the international monetary system depends on the policies and steps taken by Washington and Beijing amid global economic developments.
