Dollar Dominance Eroding as Central Banks Turn to Gold

A monetary reset is not a sudden collapse of a currency, but rather a gradual shift in how wealth is stored and valued. This process can take decades to unfold, as seen in the transition from the pound sterling to the U.S. dollar in the 19th and 20th centuries.

Currently, four structural shifts are underway that fit this pattern: the erosion of the U.S. Treasury market, central banks buying gold instead of Treasuries, a private stablecoin issuer building one of the largest gold reserves on earth, and the dollar's continued dominance in global reserves.

The U.S. Treasury market is under pressure due to persistent fiscal deficits, which have led to a growing supply of Treasury debt that must be financed. Central banks are no longer reliable buyers, and policymakers face uncomfortable choices: more Fed intervention, financial repression, or a different reserve architecture altogether.

Central banks purchased 1,136 tonnes of gold in 2022, the highest level since records began in 1950. This trend continued through 2024, with 1,045 tonnes bought that year. By 2025, buying slowed to 863 tonnes, but still far above the annual average from the 2010s.

Tether, a private stablecoin issuer, has been quietly building one of the largest gold reserves on earth, holding over 140 tonnes by January 2026 and becoming the single largest institutional gold buyer in Q3 and Q4 2025.