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Treasury Secretary Scott Bessent has stated that the recent decline in the dollar's share of global reserves is primarily the result of deliberate moves by China and Russia, not a broad-based shift away from the greenback by the international community.
Why it matters
Bessent's framing is a significant policy signal. By pinning the reserve-share decline on two geopolitically motivated actors rather than on organic market forces, the Treasury is effectively arguing that dollar hegemony remains intact among aligned and neutral economies. That reading has direct implications for how markets should price dollar-negative narratives: if the diversification is concentrated and politically driven, it is also more containable than a structural global retreat would be.
China and Russia have both accelerated moves to settle trade in non-dollar currencies and accumulate gold reserves since 2022, following the freezing of Russian central bank assets. Their combined weight in global reserve statistics is large enough to move the aggregate share figure meaningfully, which critics of dollar dominance have cited as evidence of a broader trend.
Market impact
For dollar-sensitive assets, Bessent's statement is a stabilising signal. It pushes back against the narrative that the greenback faces existential reserve-currency pressure, which has been a tailwind for gold and Bitcoin in recent months. Traders watching DXY and long-duration Treasuries will note the framing: the administration is not conceding structural dollar weakness. Whether markets accept that read depends on how far China and Russia's de-dollarisation efforts spread to other emerging-market central banks in the quarters ahead.
Frequently asked questions
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Why does Bessent's attribution to China and Russia change the dollar narrative?
If reserve diversification is driven by two geopolitically motivated actors rather than broad global demand, it suggests dollar dominance among aligned and neutral economies remains intact, making the trend more containable than headline share declines imply.
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Why have China and Russia been reducing dollar reserves?
Both countries accelerated moves to settle trade in non-dollar currencies and accumulate gold after Western nations froze Russian central bank assets in 2022, making dollar-denominated reserves a perceived liability.
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How does this statement affect gold and Bitcoin prices?
Dollar-weakness narratives have been a tailwind for gold and Bitcoin in recent months. Bessent's pushback against structural dollar decline is a stabilising signal that could reduce the urgency of that trade.
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What would signal that de-dollarisation is broader than Bessent claims?
If emerging-market central banks beyond China and Russia begin meaningfully reducing dollar holdings, the Treasury's concentrated-actors argument would weaken and the structural dollar-decline thesis would gain credibility.
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What is the current trend in the dollar's share of global reserves?
The dollar's share of global foreign exchange reserves has declined gradually over recent decades, though it remains the dominant reserve currency. Recent data has drawn attention as the pace of decline appeared to quicken.
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