Asian Central Banks Accelerate De-Dollarization, Boost Gold and Crypto Holdings Amid Geopolitical Tensions

Wealthy investors and Asian central banks are moving away from US dollar assets, prompted by concerns over the dollar’s long-term reliability, geopolitical risks, and increased US-China trade friction. UBS and Morgan Stanley note that high-net-worth individuals in Asia are reducing US exposure and diversifying portfolios with increased allocations to gold and leading cryptocurrencies like Bitcoin and Ethereum. A Bloomberg report highlights that governments in China, Japan, India, and Thailand have withdrawn up to $7.5 trillion from US assets in recent years. China has cut its US Treasury holdings to below $800 billion—its lowest level since 2009—and has grown its gold reserves for 18 consecutive months. Other Asian central banks are similarly ramping up gold purchases and diversifying reserves. This shift not only reflects a drive for better returns but also a desire to mitigate risks from possible sanctions and safeguard sovereign assets. The transition may exert long-term upward pressure on US borrowing costs and market volatility, while gradually weakening the dollar’s dominance as a reserve currency. For crypto traders, the acceleration of de-dollarization and rising gold reserves in Asia bolster the narrative of currency diversification, increasing the appeal of decentralized assets like Bitcoin, as experts argue it is now riskier to have no crypto exposure.