The dollar's slow drift out of reserves is one of the most important charts in global finance, but it moves at a pace that makes most headlines look hysterical.
The full story spans 80 years of reserve currency status, with two big breakpoints and a long, quiet drift that is still going on.
In July 1944, delegates from 44 countries met in Bretton Woods, New Hampshire, where they made the US dollar the world's reserve currency and created the IMF and the World Bank Group.
Under that system, other currencies pegged to the dollar while the dollar pegged to gold at $35 per ounce. The arrangement worked until the gold backing got too thin to support it.
In 1971, President Nixon cut the dollar's link to gold, and the Smithsonian Agreement that year formalized the move by ending the gold standard for the G-10 group of countries. Floating exchange rates took over from there, and predictions that this would end the dollar's dominance have all aged badly so far.
The dollar's share of global reserves peaked at roughly 72% in 2001 per the Federal Reserve, and sat at 56.32% as of Q2 2025 per the IMF's COFER data.
That is a 16-percentage-point drop over 24 years, and most of that move did not go to the euro, which sits around 21%. It also did not go to the Chinese yuan, which is still about 2% of global reserves.
Where did it go? Mostly into smaller, non-traditional reserve currencies like the Australian dollar, Canadian dollar, South Korean won, and a basket the IMF labels "other."
From 2017 to 2025, the "other" bucket grew from less than 3% to around 5% of global reserves, with the IMF describing the trend as "diversification and structural factors" rather than a collapse in confidence.
The dollar's share has never fallen below 50% in COFER's history.
The US Treasury identified six factors that make a currency a reserve currency: share of global GDP, share of global trade, financial market depth, financial openness, share of GDP anchored to it, and credit rating.
The dollar scores at or near the top on every one, while the yuan does not.
China still runs capital controls, which means the yuan cannot move freely across borders, and that is a hard ceiling on how much it can replace the dollar in reserves. The renminbi was only created as an IMF-recognized reserve currency in 2015, and despite a decade of effort by Beijing, it has never broken above 3% of global reserves.
Reserve managers have responded to all of this by spreading exposure, diversifying slowly, and adding gold instead of euros, yen, or yuan.
A 2025 World Gold Council survey of central banks found that 73% expected the dollar to play a smaller role in reserves five years from now, while 76% expected gold to play a bigger one.
The pound sterling lost its reserve status to the dollar over roughly 30 years, while the dollar's drift has been going on for about 25.
