Central banks in many developing countries are increasingly diversifying their reserves towards gold and their own currencies, reducing their reliance on the US dollar.
This shift is driven by concerns over the massive US national debt, which has reached $35 trillion. If the global market experiences a downturn or recession, it poses a risk. Emerging economies, especially the BRICS countries, are actively reducing their dependence on the US dollar while strengthening their own currencies.
The share of the US dollar in global reserves has significantly declined. According to a report by the Atlantic Council, its share currently stands at 59% of global reserves, compared to 72% in 2002. Over the past 13 years, the US dollar’s share in global reserves has decreased by 3%, while the share of the Chinese yuan has increased by X%.
Furthermore, the euro has also experienced a decline, dropping from 28% in 2019 to 20% in 2008.
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The BRICS countries are pushing for the use of their own currencies in international trade, which puts additional pressure on the US dollar. If this de-dollarization trend continues, the future share of the US dollar in global reserves may fall below 50%, potentially leading to severe financial instability and market turmoil in the United States.
