US dollar’s global reserve share falls to 59% this year
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The U.S. dollar is losing its grip on the world. In 2024, its share of global reserves dropped to 59%, down from 72% in 2002. That’s a 13% decline over the last 22 years.
The numbers are clear: countries, especially those in the BRICS bloc, are distancing themselves from the dollar. During the same period, China’s yuan inched up by 3%.
The U.S. dollar has been the world’s leading reserve currency since World War II. Today, it still represents 58% of the value of foreign reserve holdings. But the writing is on the wall.
The euro, the next in line, barely holds 20%. With recent global events, like Russia’s invasion of Ukraine, countries are increasingly looking to diversify their reserve holdings and reduce their reliance on the dollar.
BRICS and their de-dollarization
The BRICS nations have been the loudest in calling for a move away from USD. Over the past two years, they’ve ramped up efforts to promote the use of their national currencies in trade.
China, in particular, has been pushing hard to expand its Cross-Border Interbank Payment System (CIPS).
The goal? To create an alternative financial infrastructure that doesn’t rely on the dollar or SWIFT, the global financial messaging network.
CIPS has been growing fast. Between June 2023 and May 2024, 62 new participants joined the system, bringing the total to 142 direct and 1,394 indirect participants.
While SWIFT is still the big dog with over 11,000 connected banks, CIPS is making moves. China’s push to use the yuan in international transactions is a direct challenge to the dollar’s dominance.
