Düsseldorf, 15 April 2025
Insight EU is actively exploring and training the capabilities of AI models by engaging them with data-driven questions of contemporary relevance. This analysis was conducted using the “Deep Research / Deep Think” mode across five different models. While the initial prompt was identical for all, the interactions and outcomes varied significantly.
We are publishing the results as part of an ongoing series of reports. Readers should note that the data may contain inaccuracies, and the findings should not be interpreted as investment advice. As we will be repeating this research monthly, we aim to track how these issues and insights evolve over time.
Part II: ChatGPT’s findings
USD Currency Reserves Held by Central Banks
Global foreign exchange reserves remain heavily USD-denominated, though the dollar’s share has declined modestly over the past two decades. In 2000, roughly 71% of globally disclosed FX reserves were held in USD; by 2022 this had fallen to about 58% (federalreserve.gov).
According to IMF COFER data, the dollar still accounted for about 57.8% of world FX reserves by late 2024, equivalent to roughly $6.5–7 trillion out of $11.47 trillion allocated reserves (reuters.com). This marks a gradual shift as reserve managers diversified into other currencies.
The euro’s share rose in the 2000s (peaking near 25–30%) before settling around 20% in recent years (federalreserve.gov/reuters.com). Other major currencies like the Japanese yen (~5–6%) and British pound (~5%) together make up roughly 10% of global reserves (federalreserve.gov).
Newer reserve currencies (Canadian and Australian dollars, Chinese renminbi, Swiss franc, etc.) account for the remaining share – for example, the renminbi was about 2–3% of global reserves as of 2022–2023 (federalreserve.gov/reuters.com).
In absolute terms, total world reserves (ex-gold) grew from around $4.8 trillion in 2000 to over $12 trillion by 2024 as many central banks (especially in Asia) accumulated USD assets (suerf.orgsuerf.org).
Major Holders
The largest reserve-holding countries are heavily invested in U.S. dollar assets.
- China – with the world’s biggest reserves (~$3.2 trillion) – is estimated to keep roughly 60% of its reserves in USD-denominated assets (cfr.org). This includes over $1 trillion in U.S. Treasury securities (China’s holdings of U.S. Treasuries, while down from their peak, remained around $870 billion in 2023) and other dollar assets.
- Japan, holding about $1.25 trillion in total reserves, likewise keeps the majority in dollars – Japan’s U.S. Treasury holdings exceed $1 trillion, reflecting that its interventions and reserve investments are principally in USD (cfr.org).
- Other large emerging economies also show a strong dollar bias: for example, Brazil held 80.4% of its $325 billion reserves in USD as of 2022 (reuters.com); India and South Africa similarly hold a majority of their reserves in USD (alongside smaller portions in euros, pounds, and gold). Russia was a notable outlier – it sharply reduced the USD share of its reserves from ~40% in 2013 to around 15% by 2021 (cfr.org), reallocating into euros, yuan and gold (a shift accelerated by U.S. sanctions). After the Ukraine invasion (2022) and freezing of its dollar assets, Russia’s central bank essentially eliminated USD exposure, illustrating the geopolitical risk factor. Overall, however, most central banks – including those of the BRICS countries – continue to hold significant dollar reserves due to the dollar’s unrivaled liquidity and safe-haven status.
- Sovereign Wealth Funds: Major sovereign wealth funds in surplus economies also favor USD assets. For oil-rich states like Saudi Arabia and Qatar, oil revenue arrives in dollars, and a large portion of those petrodollars are reinvested into USD-denominated instruments (U.S. Treasuries, dollar bonds, US equities, etc.). Saudi Arabia’s central bank (SAMA) alone held about $450 billion in foreign reserves in 2022 (reuters.com), predominantly in dollar assets. Norway’s Government Pension Fund Global (the world’s largest SWF, ~$1.3+ trillion) likewise has significant USD exposure – by mandate its fixed-income portfolio is concentrated in USD, EUR, and GBP assets(bloomberg.com), and its equity holdings include large allocations to U.S. stocks (roughly mirroring global market capitalizations). These choices reflect a preference for the depth and stability of dollar markets. In sum, whether in official central bank reserves or sovereign wealth portfolios, the U.S. dollar has remained the cornerstone reserve currency.
Commentary:
The data underscore the USD’s enduring role as the pre-eminent safe haven currency. Despite a gradual dip in its share (from ~70% to ~58% of global reserves over 20+ years), the dollar remains by far the dominant reserve currency(federalreserve.gov).
Key reasons are its unrivaled liquidity, the massive size and credit quality of U.S. government debt, and the network effects of widespread dollar use in global trade/finance.
Even central banks seeking to diversify have only shifted marginally into other currencies – no alternative has come close to displacing the dollar’s scale. For example, the euro – the second-largest reserve currency – plateaued around 20% share, constrained by the eurozone’s own financial fragmentation and limited supply of ultra-safe euro assets.
Newer entrants like the Chinese yuan have made only small inroads (a few percent of reserves) given convertibility and trust concerns (see §3). The dollar’s dominance across many holders (from advanced economies like Japan to emerging giants like Brazil and India) highlights its perceived safety in times of crisis.
Notably, during global shocks (e.g. 2008 financial crisis or 2020 pandemic), demand for USD assets often increased, reinforcing the dollar’s status as the ultimate safe haven. In effect, central banks have been reluctant to “risk” straying too far from the dollar – an implicit vote of confidence in the U.S. financial system’s stability. The gradual diversification (into minor holdings of other currencies and gold) suggests reserve managers are mindful of concentration risk, but these shifts have been cautious.
Implication: So long as U.S. financial markets remain deep and U.S. Treasuries highly secure, the USD is likely to retain its safe-haven reserve currency primacy, even as its share inches down over the long term.
BRICS Statements on the Role of the USD
In recent years, the BRICS nations (Brazil, Russia, India, China, South Africa) have increasingly voiced concerns about the dollar’s dominance in trade and finance. Official statements and summit discussions reveal a clear theme: reducing dependence on the “mighty” USD in international trade settlements.
For instance, at the 2023 BRICS summit in Johannesburg, officials stressed that “there’s never been talk of a [common BRICS] currency” but affirmed that the bloc is “continu[ing] to deepen… trading in local currencies and settlement in local currencies.” (reuters.com).
South Africa’s Ambassador Anil Sooklal explicitly stated that BRICS members will “continue to switch away from the U.S. dollar”, emphasizing that “the days of a dollar-centric world is over… We have a multipolar global trading system today.” (reuters.com).
Similarly, Russia and China have repeatedly advocated for alternatives to U.S. dollar use, especially after Western sanctions on Russia. Russian officials note that sanctions “pushed countries to find alternatives to the dollar” in trade(reuters.com). China has promoted its renminbi for oil and commodity trades with partners, and India has experimented with rupee-based trade mechanisms.
Recent BRICS meetings have produced concrete initiatives aimed at de-dollarization. In 2022 and 2023, BRICS finance ministers and central banks discussed establishing cross-border payment systems that bypass the dollar. One outcome was the BRICS Cross-Border Payment Initiative, envisioning a “multi-currency” settlement system using members’ own currencies instead of USD. Likewise, Brazil and China signed a bilateral arrangement in 2023 to settle trade in yuan and reais directly (reuters.com).
Brazilian President Luiz Inácio Lula da Silva floated the idea of a BRICS common unit of account in early 2023, though by 2025 Brazil (holding BRICS presidency) clarified it “will not advance a common currency” yet is prioritizing reforms to “ease international payments in local currencies” (reuters.com). The goal, according to Brazilian officials, is to “open the door to less dependence on the dollar for global trade” (reuters.com) – for example, by improving currency swap lines, local-currency credit facilities, and possibly leveraging blockchain tech for cross-border paymentsreuters.com. All BRICS members share an interest in diluting U.S. dollar hegemony in trade invoicing and reserves, a point regularly echoed in summit communiqués.
Commentary:
BRICS statements reflect a strategic push to de-dollarize their economies, driven by both economic motives and geopolitical frictions. On one hand, greater use of local currencies can reduce exchange rate risk and transaction costs in intra-BRICS trade. On the other hand, U.S. sanctions (notably on Russia) and trade disputes have spurred these countries to seek more financial autonomy from the dollar system.
The rhetoric – “multipolar world”, “end of dollar-centric world” (reuters.com) – signals a political desire to challenge the dollar’s privileged status. However, the practical steps have so far been gradual. BRICS countries have increased bilateral currency settlements and modestly raised non-dollar reserve holdings (e.g. Brazil elevating the yuan to 5% of its reserves, surpassing the euro (reuters.com).
But no unified alternative currency has emerged – BRICS officials themselves acknowledge significant barriers to a common currency (requiring banking and fiscal union, etc.) (reuters.com). In effect, BRICS are chipping away at dollar dependence at the margins rather than fundamentally displacing it. For example, even after pushing for yuan use, China still prices the vast majority of its trade (including with BRICS partners) in USD.
The bloc’s internal dynamics also limit collective action: India remains cautious about any joint currency move(reuters.com), and each member has its own currency management priorities. The implication is that while BRICS cooperation will gradually expand the use of alternatives (yuan, rupee, etc.), the U.S. dollar will likely remain the primary vehicle for global trade and reserves in the near to medium term. Nonetheless, these coordinated efforts signal a long-run intent to build parallel systems that could, over time, erode the USD’s ubiquity – especially if joined by other emerging economies. Policymakers in the U.S. are not ignoring these trends; even former President Trump reacted sharply, threatening “100% tariffs” if BRICS “play games with the dollar” (reuters.com). While largely symbolic, such exchanges underscore that the dollar’s role, once taken as given, is now an active topic of international diplomacy.
Development of Other Reserve Assets (EUR, CHF, CNY, JPY, Gold, BTC)
Euro (EUR)
The euro quickly became the second pillar of the international reserve system after its 1999 launch. Euro-denominated assets comprised roughly 18% of global reserves in 1999 (inherited from legacy currencies like the Deutsche Mark), then rose to ~25%–30% by the mid-2000s as central banks diversified away from the dollar (suerf.org). This was aided by the euro’s strengthening and the growing depth of European bond markets. However, the euro’s ascent stalled and reversed in the 2010s. During the eurozone sovereign debt crisis (2010–2012), some reserve managers reduced euro exposure amid concerns about the euro area’s stability. By 2022 the euro’s share had fallen back to about 21% of global FX reserves (federalreserve.gov). As of late 2024 it hovers around 20% (reuters.com) – still the second-largest reserve currency, but well below the dollar. The euro remains a key reserve asset for countries with close ties to the EU (e.g. Eastern Europe, Africa), and the European Central Bank itself holds ~20% of its own reserves in USD and part in gold. The implication is that while the euro provides an alternative to the dollar, its reach is limited by the eurozone’s fragmented fiscal landscape and the preference of many investors for U.S. Treasuries in times of stress. In a sense, the euro has become a stable second choice rather than a true rival to USD dominance.
Japanese Yen (JPY)
The yen’s role as a reserve asset has been relatively steady—or slightly declining—over the period. In 2000 the yen made up on the order of 6–8% of global reserves; by 2022 it stood at 5–6% (federalreserve.gov). IMF data put the yen around 5.8% of allocated reserves in late 2024 (roughly $660 billion of assets) – making it the fourth-largest reserve currency(en.wikipedia.org). The Bank of Japan’s conservative monetary policy and Japan’s status as a creditor nation give the yen safe-haven qualities, but low yields and limited supply of Japanese government bonds (many are held by the BoJ itself) cap its appeal. The yen’s share dipped in the 2000s (as the euro gained), and then saw a mild uptick in recent years as some central banks slightly increased yen holdings during phases of dollar weakness (suerf.org). Overall, the yen serves as a supplementary reserve currency for diversification, prized for its stability, but it is not a primary reserve like USD or EUR.
Swiss Franc (CHF) and Others
The Swiss franc is historically seen as a safe-haven currency, yet it constitutes only a tiny portion of official reserves globally (typically <0.5%). Its limited share is due to Switzerland’s relatively small bond market and the Swiss National Bank’s efforts to discourage excessive franc appreciation.
Other minor reserve currencies – Canadian and Australian dollars, British pound (GBP), etc. – have seen modest increases in allocation. The British pound has actually maintained a notable share (~5%), reflecting London’s financial importance (federalreserve.gov).
Canada and Australia’s high credit ratings and commodity-backed economies have led their currencies to collectively reach a few percent of reserves (e.g. the Canadian dollar was about 2.8% of global reserves in 2024) (reuters.com). These “nontraditional” currencies together gained popularity, accounting for about 10% of reserves by 2022 (up from very little in 2000) (federalreserve.gov/suerf.org). This shift – central banks adding AUD, CAD, SEK, etc. – partly explains the dollar’s percentage decline since 2000 (federalreserve.gov). Still, each of these currencies individually remains a small sliver of global reserves, used mainly by reserve managers seeking additional diversification without venturing into riskier assets.
Chinese Renminbi (CNY)
The renminbi’s development as a reserve asset has been closely watched. China’s push for RMB internationalization led to the yuan’s inclusion in the IMF’s SDR basket in 2016, and since then many central banks have started holding RMB in reserves. From effectively 0% in 2015, the RMB climbed to 1.08% of global reserves by 2016 and about 2.8% by early 2022 (reuters.com). In nominal terms, global RMB reserves peaked at ~$337 billion in 2021 (reuters.com). However, in the last two years the trend reversed: by end of 2023 the RMB’s share had fallen to 2.29% – its lowest in three years (reuters.com). Multiple central banks reduced yuan exposure for seven consecutive quarters through 2023reuters.com. Analysts attribute this dip to China’s lower bond yield advantage (Chinese bonds no longer offer a premium over U.S./EU bonds) (reuters.com) and geopolitical caution post-Ukraine war (reserve managers may be wary of holding too many assets of a country aligned with Russia (reuters.com).
Notably, Russia itself had become the largest holder of yuan reserves (holding up to 1/3 of all international RMB reserves pre-2022) (reuters.com), but likely drew down some of that stockpile after sanctions. On the other hand, a few countries (especially in Asia and Africa) outside the IMF COFER sample have started to increase yuan holdings, partly offsetting the reductions elsewhere (reuters.com).
Bottom line: the RMB remains a minor reserve currency – about on par with the Canadian dollar’s share – despite China’s status as a global trading powerhouse. Its usage is growing in pockets (and some high-profile moves like Saudi Arabia considering yuan for oil trades), but capital controls and trust factors constrain its adoption. The Chinese yuan’s reserve status thus far is more symbolic than transformative, highlighting that significant work (in financial market openness and geopolitical confidence-building) would be needed for the RMB to approach the stature of the dollar or euro in reserves.
Gold
Gold has made a strong comeback in central bank reserve portfolios from 2000 to 2024. In the late 1990s and early 2000s, many Western central banks were net sellers of gold (the UK’s well-known sales in 1999–2002, the Swiss and others under the Central Bank Gold Agreements).
However, the 2008–2009 financial crisis marked a turning point. Since 2010, central banks switched to net buying of gold, led by emerging markets such as Russia, China, Turkey, India, and Kazakhstan. The share of gold in global reserves (by value) has thus risen in the 2010s after hitting historic lows in the early 2000s.
Notably, 2022 saw record central bank gold purchases: an estimated 1,136 tonnes of gold (worth ~$70 billion) were added to official reserves that year (reuters.com) – the most in any single year since at least 1950 (reuters.com. This surge in gold buying (highest on record per World Gold Council data) underscores a shift in sentiment: gold is viewed as a safe haven asset free of default risk and a hedge against both economic and geopolitical tail risks(reuters.com).
Countries like Russia heavily boosted gold holdings over the decade (partly to reduce reliance on dollar assets), and by 2022 Russia had ~20% of its reserves in gold. China too steadily accumulated gold (disclosing a 4.3% gold share in its reserves by 2023, up from under 2% in 2015) (imf.org). Central banks value gold for its role as an “anchor” that “does not rely on any issuer or government” (reuters.com), making it attractive amid US-China strategic competition and sanctions risks. By 2024, global official gold reserves exceeded 35,000 tonnes, roughly a fifth of all above-ground gold.
Implications: The renaissance of gold in reserves signals central banks’ desire to diversify away from paper currencies. Gold’s zero credit risk and historical store-of-value appeal complement the dollar’s dominance rather than replace it – indeed many banks are effectively swapping some dollar assets for gold as a hedge. This trend enhances the USD’s safe-haven credentials indirectly: during crises, central banks often seek both USD and gold, reinforcing the dual pillars of “liquidity (USD) and safety (gold)” in reserves (reuters.com).
Bitcoin and Cryptoassets
In the 2010s, Bitcoin (BTC) emerged as a potential digital reserve asset in the eyes of some investors, drawing comparisons to “digital gold.” However, cryptoassets are not yet part of official reserve portfolios of central banks (with very limited exceptions). No major central bank holds Bitcoin as reserves as of 2024, owing to its volatility, regulatory uncertainties, and the fact that it is not a sovereign liability.
That said, the global holdings of Bitcoin and other cryptocurrencies have grown dramatically, potentially challenging traditional safe havens at the margin. Bitcoin’s market capitalization grew from essentially zero in 2009 to about $1.28 trillion at its all-time high in November 2021 (reuters.com). It hovered around $0.5–1 trillion in 2023–2024, again breaching the $1 trillion mark in early 2024 amid renewed investment inflows (reuters.com).
This scale – while small relative to global financial markets – suggests some private actors view Bitcoin as a store of value. Indeed, some institutional investors and even a few governments (e.g. El Salvador) have treated Bitcoin as a reserve-like asset (El Salvador in 2021 adopted BTC as legal tender, implicitly adding it to national reserves in a small proportion). Additionally, certain boutique wealth funds and private treasuries started holding bitcoin as an inflation hedge.
Despite these developments, BTC remains far from a mainstream reserve asset. Its total value is a fraction of gold’s (gold’s market value is about $13 trillion, an order of magnitude higher) and infinitesimal next to the value of USD assets held by central banks.
The implication is that cryptoassets, for now, play a negligible role in official reserve allocation – their role is more pronounced in the private sector. Bitcoin would need to overcome extreme volatility and gain widespread official acceptance to be considered a safe haven on par with, say, gold. Recent years have shown crypto can surge during speculative fervor but also crash in global risk-off episodes, meaning it hasn’t yet proven a reliable counter-cyclical hedge. Central banks are generally exploring digital currencies in the form of CBDCs (central bank digital currencies) rather than holding cryptocurrency. Thus, while BTC’s rise is notable as a new store-of-value asset class, in the 2000–2024 period it has not supplanted any traditional reserve asset – rather, it exists in parallel, mainly in private hands.
Commentary
The evolving mix of reserve assets reflects a cautious diversification by central banks. The USD’s share loss (from 71% to 58%) has largely been other currencies’ gain (especially the euro initially, and “nontraditional” currencies later)(federalreserve.gov/suerf.org). Yet none of those currencies individually has undermined the dollar – instead, we have a long tail of secondary reserve currencies each occupying a few percent. This suggests the international system is slowly becoming more multi-currency, but the shift is incremental.
Gold’s revival stands out as a response to low interest rates and geopolitical uncertainty – effectively, gold is being used to bolster the safety of reserves as questions linger about fiat currencies in extreme scenarios.
Meanwhile, the rise (and pullback) of the Chinese yuan’s reserve role highlights the challenges newcomers face: even a large economy must have deep, open financial markets and geopolitical trust to see its currency widely held as a safe reserve. The mixed outcomes for euro and yuan underline that network effects and inertia in reserve composition are strong – countries won’t rapidly change the assets they consider safe.
The flirtation with Bitcoin by some investors indicates a search for alternative hedges outside the traditional central bank realm, but for official institutions, the bar for a reserve asset is extremely high (liquidity, stability, broad acceptability – criteria Bitcoin doesn’t yet consistently meet).
In summary, 2000–2024 saw a diversification at the margins of reserves: a bit less USD, a bit more of everything else (especially EUR and gold). However, the USD-centric structure remains firmly in place, with other assets playing complementary roles for specific purposes (euro for regional trade, gold for crisis insurance, etc.) rather than supplanting the dollar’s safe-haven role.
Comparison Between Global USD and BTC Volumes
When comparing the global stock of U.S. dollars to that of Bitcoin, the sheer scale of the dollar becomes apparent. The U.S. dollar is not only held as reserves by central banks but also circulates globally as cash and deposit money. As of 2024, roughly $2.3 trillion in physical U.S. currency is in circulation worldwide, and notably about 45% of U.S. banknotes are held outside the United States (stlouisfed.org) (reflecting global demand for dollars as a store of value).
If one includes dollar-denominated bank deposits (the broader money supply, M2), the total volume of USD money in circulation is on the order of tens of trillions of dollars (for example, U.S. M2 exceeded $20 trillion in 2023). This enormous base of dollars underpins the currency’s liquidity and utility.
By contrast, Bitcoin’s supply is finite – currently about 19.3 million BTC in circulation, with a hard cap of 21 million. At the Bitcoin price prevailing in late 2023, the market value of all existing bitcoin was roughly $500–600 billion. During peaks, Bitcoin’s market capitalization reached about $1.0–1.3 trillion (briefly in 2021 and again in Feb 2024) (reuters.com). Even at those highs, the total value of Bitcoin was only a small fraction of the total value of U.S. dollars in the world (for perspective, $1.3 trillion is equivalent to just 6–7% of U.S. M2 money supply). In other terms, the U.S. monetary base (currency in circulation plus bank reserves) is several times larger than the entire crypto market. Additionally, daily transaction volumes in USD (global foreign exchange turnover in USD is trillions per day) dwarf those in Bitcoin, which typically see only a few billion dollars’ worth of on-chain activity daily.
Historical development
The volume of USD in circulation has grown steadily with the world economy – for example, U.S. currency outstanding roughly doubled from ~$1.1 trillion in 2010 to ~$2.3 trillion by 2022 (stlouisfed.org), fueled by international demand (especially in emerging markets with unstable local currencies, where holding USD cash is a safe haven). Bitcoin’s growth, on the other hand, was explosive but from a tiny base: starting from essentially $0 in 2009, Bitcoin’s market cap hit $1 billion around 2013, $100 billion in 2017, and then surged to the aforementioned $1 trillion range by 2021-2024 (reuters.com). This growth was marked by high volatility – multiple boom-bust cycles saw BTC lose 50%+ of its value before reaching new highs. The U.S. dollar’s supply growth has been much more stable (barring exceptional monetary expansions like the 2008–09 and 2020 Fed quantitative easing, which still did not threaten the dollar’s reserve status). Another angle: foreign holdings of USD assets are enormous – at end-2024, foreigners held about $33 trillion in U.S.-denominated stocks and bonds (reuters.com), which represents investment assets ultimately backed by USD. There is no parallel in the Bitcoin realm, as Bitcoin is itself the asset and store of value, not a claim on an economy’s output.
Commentary
The comparison highlights that Bitcoin, despite its rapid rise, is orders of magnitude smaller than the U.S. dollar in the global financial system. The total volume of USD in circulation – both as cash and as the unit of account for bank deposits and credit – underpins its role as the world’s leading currency. Bitcoin’s roughly $1 trillion peak market value(reuters.com) is impressive for a digital asset, but it underscores that Bitcoin is still a niche holding relative to traditional currencies.
Moreover, dollars benefit from legal tender status, central bank backing, and widespread acceptance in trade and debt contracts, which Bitcoin lacks. The implications for “safe haven” status are clear: while Bitcoin is sometimes dubbed “digital gold” and can attract flows in certain crises (especially where investors fear fiat debasement), it remains highly volatile and is not widely accepted for settling debts.
In contrast, the U.S. dollar is the linchpin of the global financial system – in a crisis, investors typically seek dollars (and U.S. Treasuries) for safety and liquidity, as seen in the COVID-19 shock when USD funding was in high demand. In fact, the Federal Reserve has to provide dollar swap lines to foreign central banks in stressed times to ensure global dollar liquidity – a role no crypto asset can play. Thus, from a policy perspective, Bitcoin does not (yet) pose a challenge to the USD’s dominance; instead, it exists as an alternative speculative store of value somewhat akin to a high-volatility gold.
The stark difference in scale – trillions of USD vs. a fraction of that in BTC – means that even a dramatic growth of crypto would, for the foreseeable future, complement rather than replace traditional currencies. The key development to watch is whether Bitcoin (or other digital assets) mature to reduce volatility and gain regulatory clarity, which could make them more attractive as reserve assets. Until then, the global economy’s “safe haven” flows will continue to favor the dollar, with Bitcoin acting as a secondary refuge for a subset of investors betting on a store of value outside the traditional system.
Cross-Currency Reserve Comparison (USD in China’s Reserves vs. CNY in U.S. Reserves)
There is a striking asymmetry in how the United States and China hold each other’s currencies in reserves. China – as noted – holds a very large portion of its foreign exchange reserves in U.S. dollars. While China does not publish a detailed currency breakdown for its $3.2 trillion reserve stock, official disclosures and estimates indicate roughly $1.5–2 trillion of China’s reserves are USD assets, constituting about 60% of its total reserves (cfr.org).
In the mid-2000s, China’s dollar share was even higher (around 70–80% of reserves), but Beijing gradually diversified; by 2014 the USD share had fallen to 58% (cfr.org). It reportedly remained near that level through the late 2010s (58% in 2017 per China’s State Administration of Foreign Exchange) (cfr.org). In practice, this means China holds an enormous volume of U.S. Treasury securities, U.S. agency bonds, dollar-denominated deposits, etc. For example, Chinese holdings of U.S. Treasury bonds alone were about $1.1 trillion in 2020 (and around $860 billion as of mid-2023). These dollar holdings are a cornerstone of China’s reserve management – they help maintain stability for the renminbi’s exchange rate and serve as liquid assets for potential interventions.
China also holds other currencies (estimates suggest ~20% euros, and smaller portions in yen, pounds, and an increasing allocation to gold which reached 4–5% by 2023) (imf.org). Notably, China has minimal holdings of foreign Chinese yuan (since its own currency is not “foreign” to itself), and instead it is other countries who hold RMB (albeit in small amounts as discussed).
By contrast, the United States – which has comparatively small official FX reserves – holds virtually no Chinese yuan. The U.S. Treasury and Federal Reserve maintain a modest foreign exchange reserve primarily for smoothing markets (the U.S. doesn’t need large reserves given the dollar is its own free-floating currency).
As of early 2025, U.S. official foreign currency reserves totaled only ~$38 billion (excluding gold and SDRs)(home.treasury.govhome.treasury.gov). Crucially, these reserves are invested only in highly liquid major currencies like the euro and Japanese yen. For example, the U.S. held about $22.7 billion equivalent in euros and $11.9 billion in yen, and $0 in Chinese yuan (home.treasury.gov).
The U.S. has never announced any RMB holdings, and there is no indication of yuan in the U.S. reserve portfolio reported by the Treasury (which explicitly lists just EUR and JPY) (home.treasury.gov). This means the CNY’s share in U.S. reserves is essentially 0%, and the dollar value of yuan held by the U.S. is effectively nil. Even as other advanced countries’ central banks (like the European Central Bank or Bank of England) have added small amounts of RMB to their reserves in recent years, the U.S. has not followed suit. Given the U.S. dollar’s status, the U.S. doesn’t need to hold foreign currency for confidence – its reserves are more for operational purposes (and historically have been split roughly 50/50 between euros and yen for intervention readiness).
Comparison: In summary, China holds at least $1½–2 trillion in USD assets (≈60% of its reserves)cfr.org, whereas the U.S. holds ~$0 in RMB (0% of its reserves)home.treasury.gov. This one-way holding highlights the dollar’s dominance: China (like many nations) must hold dollars as a strategic and stabilizing asset, while the U.S., as issuer of the leading reserve currency, has no corresponding need to hold yuan. The volume of USD in China’s reserves vastly exceeds any hypothetical volume of RMB in U.S. reserves. In fact, even globally, the total known RMB reserves (~$261 billion at end-2023)reuters.com are small compared to China’s own dollar holdings. Meanwhile, U.S. official foreign currency reserves are themselves very small ($38 billion) compared to its gold holdings (the U.S. holds over 8,100 tonnes of gold, valued around $480+ billion). So the U.S. essentially holds gold and a bit of euro/yen – but no yuan.
Implications: This imbalance underscores the current international monetary order. The U.S. enjoys the “exorbitant privilege” of not needing to hold others’ currencies; it can borrow in its own currency, and other countries eagerly hold USD for safety. China’s heavy USD reserves position, while providing financial security (for currency defense and as a rainy-day fund), also ties it to the dollar.
Changes in U.S. monetary policy or dollar value directly affect the value of China’s reserves. In contrast, the U.S. is largely insulated from Chinese monetary actions – since it holds no yuan, a yuan depreciation or policy change has negligible direct impact on U.S. reserve assets. This asymmetry also reflects why China (and other emerging powers) seek to eventually reform the system: it can be seen as a vulnerability that China must hold so much wealth in another country’s currency.
China has, in the past decade, taken steps to very gradually reduce its U.S. Treasury holdings and diversify into projects like the Belt and Road (essentially deploying some reserves into overseas development rather than traditional reserve assets) (cfr.org). But such moves are limited by the need to maintain liquidity and capital preservation.
For the U.S., not holding RMB is logical, as the yuan is not freely usable or necessary for Fed operations, and also strategic, as holding significant foreign reserves could undermine confidence in the dollar. It’s worth noting that other countries also largely do not hold yuan in significant size (apart from those with swap lines with China). Therefore, the US-China reserve comparison exemplifies the dollar’s entrenched role: China finances the U.S. (via Treasury holdings) far more than the U.S. would ever need to finance China.
From a policy viewpoint, China’s USD reserves serve as a key stabilizer for its currency (and a deterrent against financial crises), while the U.S.’s minimal FX reserves signal the dollar’s unique position. Unless the renminbi undergoes major internationalization and China liberalizes its financial system, this situation – China as a major holder of USD, and the U.S. holding no CNY – will persist. It is a cornerstone of the current safe-haven status of the USD: even its primary geopolitical competitor must rely on it.
Source – ChatGPT – Deep Research, prompted by Insight EU