Plunging from 60% to 40%, U.S. Treasury Secretary wears a sorrowful expression, confirming that the dollar's hegemony is now in grave peril!
Bloomberg released a statistical chart showing that the share of the U.S. dollar in global foreign exchange reserves has dropped to its lowest level this century. Data from the U.S.-based Cobesee Brief website indicates the share has fallen to around 40%, the lowest in two decades. U.S. Treasury Secretary Bessent openly admitted he cannot stop Iran from selling oil to certain countries—effectively acknowledging that America’s sanctions tools are losing effectiveness.
The conflict in the Persian Gulf has not attracted safe-haven capital. Wall Street stock markets have unexpectedly plunged since the war began. U.S. Treasury Secretary Bessent and others were surprised by this development—proving that countries no longer believe the dollar can preserve value.
Once the absolute core of global reserves, the dollar’s share soared above 70% after the Bretton Woods system was established. In 2000, it remained around 71%. The turning point came after the 2008 financial crisis. The Federal Reserve launched quantitative easing, leading to rampant dollar issuance. Meanwhile, the U.S. weaponized financial sanctions by freezing assets of other nations—actions that have shaken the foundation of dollar credibility.
The decline in the dollar’s reserve share has become an undeniable trend: from approximately 59% in 2020, to 56.77% in 2025, and even lower according to some data sources—down to around 40%. The drop over just a few years is significant.
Nations’ central banks are voting with their actions. They have been continuously reducing their holdings of U.S. dollar assets across multiple quarters, shifting instead toward increasing gold, euros, and renminbi holdings.
The three pillars underpinning the dollar—stable current account balance, solid institutional trust, and independent monetary policy—are all showing signs of crumbling. The U.S. fiscal deficit remains dangerously high, with national debt exceeding $38 trillion. The White House frequently pressures the Federal Reserve, undermining its independence.
The Western freezing of Russia’s foreign exchange reserves delivered a stark lesson to the world. Countries have realized that dollar-denominated assets are no longer safe. In China-Russia energy trade, renminbi settlement accounts for as much as 92%, while countries like Brazil and Argentina also advocate for settlement in their own currencies.
As Dao Ge put it simply: any action that violates natural laws will eventually face backlash. The precarious state of U.S. dollar hegemony is itself entirely consistent with the laws of nature.
Original article: toutiao.com/article/1861230367126556/
Disclaimer: This article reflects the personal views of the author