China and India Lead Global De-dollarization Trend With Strategic Treasury Pullback

Over the past year, a significant shift in asset allocation has emerged among major emerging markets. China and India, alongside Brazil, have collectively reduced their U.S. Treasury holdings by approximately $183.2 billion, signaling a broader repositioning of international financial reserves away from dollar-denominated assets. This coordinated divestment reflects heightened concerns about currency stability and geopolitical risks inherent in maintaining large dollar exposures.

China and India Spearhead the Treasury Reduction Initiative

The Treasury divestment by China and India represents a calculated move to diversify their foreign exchange reserves. According to data from NS3.AI, these three nations have systematically reduced their dependence on U.S. government securities, with China and India leading this reduction effort. The pullback reflects concerns over potential restrictions on dollar access and the desire to mitigate exposure to U.S. fiscal and monetary policy decisions. This shift is particularly noteworthy as China and India together hold substantial portions of global currency reserves, making their reallocation decisions influential across international markets.

Gold Reserves Surge as Strategic Hedging Tool

Concurrently with Treasury divestment, China, India, and Brazil have substantially increased their gold reserves, which now exceed 3,350 tons collectively, representing a valuation between $430-450 billion. Gold has emerged as the preferred alternative to dollar holdings, offering protection against currency devaluation and geopolitical volatility. This strategic accumulation demonstrates how major economies are reshaping their reserve compositions to hedge against potential weaponization of the dollar as a foreign policy instrument.

De-dollarization Within BRICS Framework: Implications for Global Markets

The coordinated actions by China, India, and Brazil exemplify the accelerating de-dollarization momentum within the BRICS alliance. By systematically reducing Treasury exposure and building gold stockpiles, these nations are signaling reduced confidence in dollar-centric reserve systems. This trend carries significant implications for global currency markets, international trade settlements, and the long-term dominance of the U.S. dollar. As more major economies follow similar patterns of reserve diversification, the potential for structural shifts in international monetary systems becomes increasingly evident, reinforcing BRICS’ broader push toward greater monetary independence and reduced reliance on Western financial infrastructure.