Synopsis
What if I told you that for the first time since 1996, the world’s central banks trust gold more than the mighty U.S. dollar? With over 36,000 tonnes of gold now in their vaults—more than their U.S. Treasury holdings—this quiet shift is shaking the foundations of global finance. Welcome to the era of de-dollarisation 2025.
Table of Contents
Introduction: A Quiet Revolution You Might Not Notice
Imagine you’re running a household. For years, you’ve kept your savings in a fixed deposit because it seemed safe and reliable. Suddenly, you start worrying—what if the bank freezes your money? What if inflation eats away its value? To protect yourself, you decide to shift part of your savings into gold, something that holds value no matter what.
This mirrors the global financial shift unfolding under the banner of de-dollarisation 2025. For the first time since 1996, central banks across the world now hold more gold than U.S. Treasury securities—a symbolic milestone in the accelerating wave of de-dollarisation 2025, where nations are actively reducing their reliance on the U.S. dollar.
From India to China, and especially within the BRICS block, countries are rethinking their strategies. Instead of putting all their eggs in one basket (the dollar), they’re diversifying into gold and alternative currencies—core pillars of de-dollarisation 2025.
The Numbers Don’t Lie: Gold Takes the Lead
Here’s where it gets interesting. Central banks now collectively own over 36,000 tonnes of gold—that’s heavier than 100 Empire State Buildings stacked together! And for the first time in three decades, this amount is more than their holdings in U.S. Treasury bills.
The World Gold Council shows how quickly this shift has picked up speed:
- 182 tonnes of gold were bought in 2022
- 37 tonnes in 2023
- A jaw-dropping 1,180 tonnes in 2024
This isn’t just about shiny yellow metal. It’s about trust. Gold doesn’t default, it doesn’t get frozen, and it’s not tied to any one country’s politics.
Gold is on fire:
— The Kobeissi Letter (@KobeissiLetter) August 29, 2025
World central banks’ gold holdings now reflect 27% of total foreign reserves, the highest share in 29 years.
At the same time, foreign holdings of US Treasuries as % of reserves have declined to ~23%, the lowest since the 2008 Financial Crisis, per Crescat… pic.twitter.com/hrKnXnGcpJ
India’s Big Move: Less Treasuries, More Gold
Take India as an example. Normally, a growing economy buys more U.S. Treasuries to show stability and attract foreign investors. But India has taken a different path.
- In 2024, India held $242 billion in U.S. Treasuries.
- By 2025, that number dropped to $227 billion—a $15 billion cut.
- At the same time, the Reserve Bank of India (RBI) added 40 tonnes of gold to its reserves.
Why? Think of it like insuring your savings. Treasuries are safe most of the time, but what if global politics turns against you? India is protecting itself by diversifying, just like a family keeps some money in a savings account and some in gold jewellery.
Why Central Banks Are Losing Faith in the Dollar
So why are countries doing this? Three big reasons stand out:
Geopolitics: When Money Becomes a Weapon
After Russia’s invasion of Ukraine, the U.S. and allies froze Russia’s central bank assets. For many nations, this was a wake-up call: “If it can happen to Russia, it can happen to us.” Holding too many dollars suddenly looked risky.
Gold, in contrast, is like keeping your savings under your own lock and key. No one can freeze it.
Inflation & Debt: America’s Financial Headaches
The U.S. is dealing with huge debts and persistent inflation. Imagine lending money to a friend who keeps borrowing more and more—eventually you worry whether they can pay you back in full. That’s how central banks see Treasuries now.
Gold, on the other hand, doesn’t lose value the way paper money can.
BRICS: Building a Parallel System
The BRICS nations (Brazil, Russia, India, China, South Africa) are becoming an economic powerhouse:
- 40% of global GDP
- 46% of the world’s population
- 40% of global oil production
They’re also experimenting with new systems like BRICS Pay and trading in local currencies. Think of it like a group of friends deciding to stop borrowing money from the same rich neighbor and instead lending to each other.
De-Dollarisation in Action: Slow and Steady Wins the Race
This isn’t happening overnight—it’s gradual and deliberate. Central banks aren’t suddenly dumping dollars; they’re simply letting their existing U.S. assets expire and choosing not to buy new ones.
- China’s holdings of U.S. dollars have already fallen from over $1 trillion to $756 billion.
- India’s Treasury exposure has dropped despite its growing trade surplus.
- Collectively, the Global South still has $9 trillion in dollar assets, but countries are slowly shifting away.
This quiet strategy prevents market chaos while steadily reducing dollar dominance.
Calm Before the Storm: What Could Accelerate De-Dollarisation 2025?
While the current shift away from the dollar is measured and methodical, several global flashpoints could act as accelerants—turning a slow burn into a financial wildfire. Let’s break down three high-impact scenarios that could dramatically reshape the global monetary order:
If Taiwan Heats Up: A military or diplomatic escalation over Taiwan could trigger a seismic shift in global finance. If the U.S. responds with sanctions against China—similar to its actions against Russia in 2022—the consequences could be immediate and irreversible.
- Frozen reserves: Countries holding dollar assets would fear sudden asset freezes. Russia lost access to over $300 billion in reserves overnight. If China faces similar treatment, trust in the dollar’s neutrality would evaporate.
- Flight to safety—outside the dollar: Nations would rush to diversify into gold, yuan, or regional currencies to avoid geopolitical risk. This would turbocharge de-dollarisation 2025, not just among adversaries but also among neutral economies.
In short, the dollar’s role as a “safe haven” could be shattered—not by economics, but by geopolitics.
A U.S. Debt Crisis and the Rise of De-Dollarisation 2025
America’s debt-to-GDP ratio has crossed 123% in 2025, prompting Moody’s to downgrade its sovereign rating from Aaa to Aa12. If major foreign holders—like Japan, China, or Canada—begin pulling back, the U.S. Treasury market could face a serious confidence crisis.
• Rising yields, falling trust: Higher interest rates are no longer a magnet for buyers if they signal fiscal instability. In fact, 2025 has already seen a troubling divergence: soaring Treasury yields paired with a weakening dollar. It’s a red flag for systemic risk.
• Refinancing pressure: With over $5 trillion in U.S. debt maturing soon, refinancing costs could surge. If pension funds and offshore havens like the Cayman Islands can’t absorb the excess supply, the dollar’s credibility may erode further.
This scenario doesn’t just threaten the dollar—it undermines the entire architecture of global finance built around U.S. Treasuries. And it’s precisely this fragility that’s fueling de-dollarisation 2025—a global pivot toward gold, bilateral currency swaps, and alternative reserve strategies.
End of the Petrodollar: For decades, oil was priced in dollars—a system that guaranteed global demand for the greenback. But that monopoly is now under threat.
- BRICS pushback: Countries like China, Russia, and Saudi Arabia are increasingly trading oil in yuan, rubles, and rupees. In fact, over 78% of Russian crude exports to China and India were settled in local currencies between 2022–20233.
- Strategic realignment: With Saudi Arabia joining BRICS+ and hinting at yuan-based oil sales, the petrodollar’s foundation is cracking. If even a fraction of global oil trade shifts away from the dollar, it could trigger a cascading drop in demand for dollar reserves.
This isn’t just a currency story—it’s a geopolitical realignment that could redefine energy markets and reserve strategies worldwide.
Each of these scenarios—Taiwan, U.S. debt, and the petrodollar—represents a potential tipping point. While de-dollarisation 2025 is currently unfolding in slow motion, any one of these flashpoints could turn it into a sprint.
| ⚠️ Scenario | 🔍 Risk | 🌍 Impact |
|---|---|---|
| Taiwan Conflict | U.S. sanctions on China | Dollar trust collapses, reserves shift to gold/yuan |
| U.S. Debt Crisis | Treasury buyers dry up | Global sell-off, rising yields, dollar instability |
| End of Petrodollar | BRICS oil trade in local currencies | Shrinking dollar demand, rise of multipolar finance |
Is the Dollar Really Finished?
Not everyone agrees the dollar is in trouble. In fact, many economists, policymakers, and market participants argue that the U.S. dollar remains irreplaceable in the current global financial architecture. Their reasoning is grounded in several key advantages:
- It’s still the dominant currency for global trade: Over 80% of international transactions are invoiced in dollars, even when the U.S. isn’t directly involved. From oil contracts to aircraft deals, the dollar remains the default medium of exchange, giving it unmatched utility and inertia.
- U.S. financial markets are deep, liquid, and trusted: Investors and central banks prefer dollar-denominated assets because they can be bought or sold quickly without significantly affecting prices. The sheer scale and transparency of U.S. capital markets make them a safe haven during global uncertainty.
- No viable alternative has emerged—yet: While the euro, yuan, and even gold-backed digital currencies are gaining traction, none offer the same combination of liquidity, legal infrastructure, and geopolitical backing. China’s yuan, for instance, is constrained by capital controls and limited convertibility, while the euro suffers from fragmented fiscal governance.
And to be fair, these supporters are right—for now. The dollar won’t disappear overnight. Its entrenched position is the result of decades of trust, infrastructure, and global alignment. But what’s changing is the monopoly it has enjoyed since the Bretton Woods era. That dominance is no longer taken for granted.
From BRICS currency talks to bilateral trade agreements bypassing the dollar, the world is quietly building alternatives. The rise of de-dollarisation 2025 is not about immediate replacement—it’s about strategic diversification. Countries are hedging their bets, reducing exposure to U.S. sanctions, and seeking monetary sovereignty.
In short, the dollar is still king—but the palace gates are no longer locked.
Editorial View: The Future Is Multipolar
What we’re witnessing today isn’t just a financial adjustment—it’s a profound geopolitical shift. The dominance of a single currency, the U.S. dollar, is being quietly but steadily challenged. This isn’t about chaos or collapse. It’s about realignment. The world is moving from a unipolar monetary system to a multipolar financial landscape, and de-dollarisation 2025 is the defining theme of this transition.
Gold is making a strategic comeback—not because it’s flashy, but because it’s neutral, reliable, and geopolitically safe. Unlike fiat currencies tied to national interests, gold doesn’t discriminate. It doesn’t sanction. It doesn’t freeze. That’s why countries like India, China, and Brazil are increasing their gold reserves while trimming exposure to U.S. Treasuries. They’re signaling a desire for monetary sovereignty—a buffer against external pressure.
Imagine the global financial system as a highway. For decades, it’s been a one-lane road dominated by a single truck—the dollar. Every nation had to follow behind, regardless of speed, direction, or preference. But now, we’re seeing the emergence of a multi-lane expressway, where local currencies, gold reserves, and digital payment systems are all viable vehicles. Each country chooses its lane, its speed, and its destination.
This is the essence of de-dollarisation 2025: not a rejection of the dollar, but a rebalancing of power. It’s about creating optionality, reducing vulnerability, and embracing a world where no single currency dictates the rules.
The future isn’t anti-dollar. It’s post-dollar.
India’s Strategic Edge in De-Dollarisation 2025
As global central banks accelerate their shift from U.S. Treasuries to gold, India is uniquely positioned to benefit from de-dollarisation 2025. This isn’t just a financial trend—it’s a geopolitical reset, and India has quietly laid the groundwork to thrive in it.
- Rising gold reserves signal India’s intent to strengthen its monetary backbone. This builds investor confidence and reduces vulnerability to dollar-driven volatility.
- The digital rupee, backed by RBI’s pilot program, offers India a chance to lead in secure, scalable cross-border payments—especially across South Asia and Africa.
- Rupee trade agreements with countries like UAE and Russia are already easing forex pressure and opening new export corridors, making India less dependent on dollar settlements.
Also Read about- BRICS Currency and De-dollarization: The Beginning of a New Global Financial Era 2025
People Also Ask
- Why are central banks buying so much gold instead of U.S. dollars?
Because gold is seen as a safer asset during geopolitical uncertainty, rising U.S. debt, and the risk of sanctions on dollar reserves. - How much gold do central banks currently hold worldwide?
Central banks collectively hold over 36,000 tonnes of gold, making it more than their U.S. Treasury holdings for the first time since 1996. - What does de-dollarisation mean in simple terms?
De-dollarisation means countries are slowly reducing their dependence on the U.S. dollar for trade and reserves, and moving towards gold, local currencies, or new payment systems. - Why did India cut its U.S. Treasury holdings in 2025?
India reduced its Treasury holdings from $242 billion in 2024 to $227 billion in 2025, while adding 40 tonnes of gold, to safeguard its reserves from political and financial risks. - Is the U.S. dollar really losing its global dominance?
The dollar is still the world’s leading currency, but its monopoly is weakening as BRICS countries trade more in local currencies and accumulate gold. - What could speed up de-dollarisation worldwide?
Major events like a Taiwan conflict, U.S. debt crisis, or the end of the petrodollar system could accelerate the decline of dollar dominance. - How does BRICS challenge the U.S. dollar?
BRICS nations account for 40% of global GDP and 46% of the world’s population. They are building alternatives like BRICS Pay and increasing trade in local currencies, reducing reliance on the dollar.
Conclusion: The Dollar’s Era of Total Power Is Fading
History shows that no reserve currency lasts forever. The British pound once ruled global trade before giving way to the dollar. Now, the dollar’s supremacy is being challenged.
Gold is back in the spotlight—not because of hype, but because central banks are quietly and steadily stacking it up. With over 36,000 tonnes held globally, gold is once again the foundation of financial security.
The world is moving toward a multipolar system—less dependent on one currency, more diversified, and much harder to control by any single country. The sunset of dollar dominance has begun, and gold is leading the way.
FAQs on de-dollarisation 2025
Q1. What is de-dollarisation?
De-dollarisation is the global trend where countries reduce their reliance on the U.S. dollar in trade and reserves, diversifying into assets like gold and local currencies.
Q2. Why are central banks buying more gold in 2024–2025?
Central banks purchased a record 1,180 tonnes of gold in 2024 because gold is considered safer than U.S. Treasuries, especially amid rising geopolitical tensions and U.S. debt concerns.
Q3. How much gold do central banks hold in 2025?
Central banks collectively hold over 36,000 tonnes of gold, which has now surpassed their holdings in U.S. Treasury securities.
Q4. Why is India reducing its U.S. Treasury holdings?
India cut its Treasuries from $242 billion in 2024 to $227 billion in 2025 and added 40 tonnes of gold to diversify reserves and protect against dollar risks.
Q5. Is the U.S. dollar losing its dominance?
Yes, the dollar’s dominance is gradually declining. BRICS nations, rising gold purchases, and local currency trade are all reducing global reliance on the dollar.
Q6. What role does BRICS play in de-dollarisation?
BRICS accounts for 40% of global GDP and is actively promoting local currency trade and digital payment systems like BRICS Pay, which challenges the dollar’s monopoly.
Q7. Could the dollar collapse suddenly?
While unlikely in the short term, scenarios like a Taiwan conflict, a U.S. debt crisis, or the end of the petrodollar could accelerate the dollar’s decline.
Q8. Is gold safer than U.S. Treasuries?
Yes. Unlike Treasuries, gold cannot be defaulted on or frozen by sanctions, making it a secure hedge against geopolitical and financial risks.
Q9. What does de-dollarisation mean for ordinary investors?
It signals a long-term shift where gold and alternative assets may gain more importance. Investors should watch central bank gold purchases as a key economic signal.
Q10. Will another currency replace the dollar?
Not immediately. While no single currency can replace the dollar yet, a multipolar financial system with gold, regional currencies, and digital systems is emerging.
Pratik Kondawale
Strategist | Indian Defence & Global Affairs
Founder of GeoLens.in, Pratik writes in-depth analysis on India’s defence strategy, military tech, and global power shifts delivering sharp insights through an Indian lens.