The US dollar's share of global foreign exchange reserves has fallen to its lowest level this century, underlining a slow-moving long-term de-dollarisation by central banks to diversify away from the world's dominant reserve currency.

The process is going to take some time as the greenback remains unrivalled at the heart of the international financial system, but it is part of the post Pax Americana transition away from US dominance of the global system. The next interregnum has already started and as IntelliNews argued one of the features of these post-empire periods is a period of chaos and multipolarism and a change of reserve currency.

According to the latest data from the International Monetary Fund (IMF), the dollar accounted for 56.8% of disclosed global foreign exchange reserves at the end of 2025, down from more than 72% at its peak in 2001 and the lowest share recorded in more than two decades.

The decline is the latest milestone in a gradual process of reserve diversification that has accelerated since the US weaponised the dollar and barred Russia in the 2022 sanctions following the invasion of Ukraine. Designed to cause Russia to collapse and cut it out of global trade, one of the unintended consequences was central bankers from the Global South were seriously unnerved as it became clear any country that kept its reserves in dollars was vulnerable to punishment. Everyone accelerated efforts to diversify their reserves.

As IntelliNews Lambda reported, Russia had already dumped its dollar denominated US treasury bill holdings before the invasion, but all the other major BRICS nations accelerated their sell off after the so-called SWIFT sanctions were announced.

With no viable replacement, the dollar continues to account for well over half of the world's official foreign exchange reserves and remains the dominant currency for international trade, cross-border lending, debt issuance and foreign exchange transactions. No rival currency currently possesses the liquidity, depth of capital markets or institutional framework needed to replace it.

Nevertheless, in less than a year, the replacement of the dollar with something else “is no longer a fantasy” according to, Jim O’Neill said in a recent interview with Bloomberg, the former head of research at Goldman Sachs and the man that coined the term “BRIC” in the 1990s. With the BRICS nations exploring a shared digital currency and India already testing local currency settlements with Gulf nations. Russia and China already do almost all their mutual trade in national currencies. O’Neill speculates that instead of a new currency taking over, the next global currency of trade is likely to be a stable coin – a mix of digital versions of all the trading nations.

Reserve managers are already diversifying into a wider basket of smaller currencies including the Canadian dollar, Australian dollar, Swedish krona, Norwegian krone, Swiss franc and South Korean won.

"The story isn't one of de-dollarisation so much as diversification," analysts have argued, noting that central banks are spreading risk across a broader range of highly liquid reserve assets rather than abandoning the dollar altogether.

The euro has remained broadly stable at around one-fifth of global reserves, while the renminbi has made only modest gains despite Chinese President Xi Jinping calling for the renminbi to become a global reserve currency earlier this year.

Despite Beijing's efforts to internationalise its currency, capital controls, concerns over transparency and the relatively limited size of China's financial markets continue to constrain wider adoption of the yuan as a reserve asset.

The sanctions imposed on Russia in 2022 were a milestone in the dollar's journey downwards, prompting many Global South central banks to reassess the composition of their reserve portfolios. The freezing of hundreds of billions of dollars of Russian central bank assets, and the repeated (as yet unsuccessful) attempts to confiscate that money, highlighted the geopolitical risks associated with holding reserves denominated in dollars that used to be the most trusted currency in the world.

Gold has become a favoured substitute, enjoying record demand from central banks over the past three years, as well as heightened interest in non-traditional reserve currencies. However, much of the recent decline in the dollar's reported reserve share also reflects valuation effects as fluctuations in exchange rates alter the dollar value of non-dollar assets, rather than large-scale selling of US assets by central banks.

Global foreign exchange reserves have continued to grow despite the changing composition, reaching more than $13 trillion at the end of 2025, according to the IMF's Currency Composition of Official Foreign Exchange Reserves (COFER) database.