Global Central Banks signal shift away from Dollar as Gold and Yuan gain appeal
More of the world’s central banks plan to reduce their U.S. dollar holdings than increase them over the next decade for the first time, according to a new survey by the Official Monetary and Financial Institutions Forum (OMFIF), reflecting growing concerns over political and geopolitical risks linked to the world’s dominant reserve currency.
The survey, which covered 90 central banks, sovereign wealth funds and public pension funds overseeing a combined $10 trillion in assets, found that 79% of central banks and 60% of sovereign wealth funds believe the global monetary system is gradually evolving toward a multipolar structure, with reserve assets becoming more diversified beyond the U.S. dollar.
While the dollar remains the world’s leading reserve currency and has strengthened this year, reserve managers increasingly see the need to diversify. Interest is rising in alternative currencies, including China’s yuan, the euro, the British pound, the Norwegian krone and the New Zealand dollar. Survey respondents said the yuan remains an attractive diversification tool, although structural challenges continue to limit wider adoption.
Gold emerged as one of the biggest beneficiaries of the trend. The survey found that 82% of central banks already hold gold, and a net 30% plan to increase their gold allocations within the next one to two years, making it the reserve asset with the strongest near-term demand. OMFIF said gold has become central to reserve management strategies as policymakers seek protection against geopolitical uncertainty and market volatility
.
The report also highlights broader changes in how public investors are managing portfolios in an increasingly uncertain global environment. Nearly 60% of sovereign wealth funds intend to increase investments in physical assets such as infrastructure and real estate, while 38% plan to raise allocations to emerging markets, up from 27% a year earlier. The United States and China remain the most attractive investment destinations, supported by their leadership in artificial intelligence technologies.
Artificial intelligence is also becoming a growing priority for central banks. More than two-thirds of respondents said they plan to expand AI use, primarily for data analysis and operational functions, with adoption significantly higher among advanced economies than emerging markets.
The findings add to growing evidence that global reserve managers are gradually diversifying their portfolios rather than abandoning the dollar outright. Although the U.S. currency is expected to remain the world’s dominant reserve asset for years to come, the survey suggests central banks are increasingly positioning for a more diversified international monetary system.