Every day, one story that matters, broken down into three numbered scenarios, each with its own probability. Never fixed — it shifts as the situation changes.
Scénario
Thursday, global economy & finance
Dollar: the end of an era?
Publié le 17 septembre 2026
Share:
The question at hand
Faced with record debt and central banks' rush toward gold, could the dollar lose its status as the world's reserve currency?
The facts
Since 1944, the dollar has been the currency that everyone uses to store wealth at the national level. Central banks around the world — which manage countries' foreign exchange reserves, a bit like a national safety cushion — hold a large share of these reserves in dollars rather than in euros, yen or yuan. This status gives the United States an enormous privilege: it can borrow almost without limit, in its own currency, at lower rates than any other country. It's this privilege that is now being called into question, though it's still unclear whether this is simple erosion or a genuine turning point.
The most direct signal comes from IMF figures: the dollar's share of official global foreign exchange reserves fell to 56.9% in the third quarter of 2025, its lowest level since 1995. This figure is measured by the IMF's COFER data, published every quarter. It doesn't mean the dollar is collapsing: it remains, by far, the most used currency in the world, involved in 89% of foreign exchange market transactions. But the underlying trend has never really reversed since the 72% peak reached in 2001.
Understanding it
The dollar's status is actually measured by three distinct indicators, which don't move in lockstep.
It's a bit like measuring how popular a language is: its presence in school textbooks (reserves, 57%) doesn't change at the same pace as its use in everyday conversation (foreign exchange transactions, 89%) or in trade contracts (invoicing, around 54%). So a figure going down doesn't mean all three are declining at once.
At the same time, the US fiscal situation has clearly deteriorated. US federal debt crossed the $40.047 trillion threshold for the first time on August 20, 2026. It had already topped $39 trillion in March, showing how fast it's climbing. The direct consequence: the interest the US government pays each year to service this debt reached $963 billion over ten months, or more than $3 billion a day. This interest burden is weighing ever more heavily on the federal budget, to the point of rivaling spending categories like defense. We already covered a similar topic — read our article for more.
This climate of doubt is pushing several central banks to diversify their reserves, and gold is the most visible symbol of that shift. Central banks bought a net 244 tonnes of gold in the first quarter of 2026, a pace that extends a streak of sustained net purchases to 17 consecutive months. Gold has one advantage the dollar doesn't: it belongs to no country, so no government can freeze or sanction it. That's the reasoning that has driven countries like Poland, China and Kazakhstan to keep accumulating more of it for several years now.
China, for its part, is betting on a different strategy: building its own international payment network to bypass the current system, which is still largely dominated by the dollar. Its CIPS system connected 1,580 financial institutions across 122 countries as of March 31, 2026, up from 1,280 at the end of 2023. That's real progress, but it remains marginal compared with SWIFT, the global network where the dollar still dominates by far. The yuan, despite this rise, still accounts for only a very small share of international reserves and payments, held back by the capital controls imposed by Beijing.
It's this combination of signals — a slow but real decline in reserves, exploding debt, a rush toward gold, and the rise of still-modest alternatives — that makes the outcome uncertain. Some economists, such as those at the Council on Foreign Relations, downplay the phenomenon significantly: much of the recent decline, they argue, simply reflects exchange rate effects rather than a genuine decision by central banks to turn away from the dollar. Others, conversely, see it as a structural acceleration. It's to settle between these two readings, with no certainty possible today, that three scenarios emerge: a status quo that holds, a slow decline that continues as it has for 25 years, or a sharp acceleration in the loss of confidence.
Understanding it
A drop in the dollar's share of reserves doesn't always mean central banks are actively selling their dollars.
It's like a stock portfolio: if a stock's price falls, its weight in your portfolio shrinks mechanically, even if you haven't sold anything. Similarly, part of the dollar's recent decline in reserves simply comes from currency movements, not necessarily from an active choice by central banks to turn away from it.
Dollar's share of global foreign exchange reserves56.9% (Q3 2025) lowest level since 1995, down from a 72% peak in 2001
US federal public debt$40.047 trillion threshold crossed on August 20, 2026, up from under $20 trillion in 2016
Repère historique
Le recul du dollar n'est pas nouveau : sa part dans les réserves mondiales a déjà connu de fortes variations depuis 50 ans.
Source : FMI, données COFER (Currency Composition of Official Foreign Exchange Reserves).
Favorable, stable, or degraded
Le dollar peut-il perdre sa place de monnaie reine du monde ?
What we're assessing
FavorableLe dollar stabilise sa position grâce à la confiance retrouvée dans la politique de la Fed.
StableLe recul se poursuit à un rythme lent, sans rupture, comme depuis deux décennies.
DégradéLa perte de confiance s'accélère nettement, dette et alternatives progressant ensemble.
Favorable
30%
Likely
The dollar stabilizes its dominant position
In this scenario, the Fed restores market confidence through monetary policy seen as credible, and the US Treasury manages to contain rising borrowing costs thanks to its bond buybacks, doubled to $4 billion per operation since August 2026. The dollar's share of reserves stabilizes around 57%, with no further marked decline. The absence of a truly usable alternative to the dollar works in its favor: the yuan remains constrained by China's capital controls, and no other currency has the depth of US bond markets.
This scenario assumes that the two drivers of current concern — debt and the flight toward gold — lose intensity, unlike the deteriorated scenario where they feed off each other. It also differs from the stable scenario in that it implies a genuine halt, not just a pause in an ongoing decline. This is the least likely of the three scenarios, since none of the recent facts ($40 trillion in debt, the 17th straight month of gold purchases) point in this direction.
Indicators affected
Part du dollar dans les réserves mondiales≈57%→56,9%
Dette publique fédérale américainecroissance ralentie↑40 047 milliards de dollars
The France angleA stabilization of the dollar would ease pressure on global borrowing costs, including for France. ↑ Rather favorable for France.
Stable
50%
Fairly likely
The dollar's slow decline continues without a break
This scenario simply extends the trend observed over the past 25 years: a few percentage points of market share lost per decade, without collapse or any identifiable replacement. The dollar remains largely dominant in foreign exchange transactions (89%) and in global trade invoicing, even as its share of reserves keeps eroding, quarter after quarter. Central bank gold purchases and the growth of China's CIPS continue, but at a pace comparable to recent months, without a sharp acceleration.
This is the scenario that best fits the available data: the decline from 72% to 56.9% played out over 25 years, not a few months. It differs from the deteriorated scenario in the absence of a shock — no sudden new fiscal deterioration, no marked acceleration in CIPS — and from the favorable scenario in the absence of any sign of stabilization in the most recent figures. This is the default trajectory, the one most economists expect in the absence of a triggering event.
Indicators affected
Part du dollar dans les réserves mondialesrecul lent, vers 55-56%↓56,9%
Dette publique fédérale américainehausse continue, au-delà de 41 000 milliards↑40 047 milliards de dollars
The France angleThe current status quo is already keeping pressure on French borrowing costs, with no improvement in sight. ↓ Rather unfavorable for France.
Degraded
20%
Unlikely
Confidence in the dollar erodes sharply
In this scenario, several negative signals reinforce one another at the same time: a fresh deterioration in US fiscal conditions, bond yields climbing even further above the 5.22% already reached in August 2026 on 30-year bonds, and an acceleration in gold purchases and China's CIPS network. The dollar's share of reserves would then fall faster than the historical trend, dropping well below the current 56.9% floor, while US borrowing costs would stay elevated for an extended period.
This scenario stands apart from the other two in its speed: it's not just that the dollar declines, but that the decline accelerates beyond the pace observed over the past 25 years. Unlike the stable scenario, debt and de-dollarization would feed off each other rather than evolving separately. This scenario is seen as unlikely in the short term, since it requires a clear confidence shock, whereas no top-tier source is currently signaling such an imminent turning point.
Indicators affected
Part du dollar dans les réserves mondialeschute marquée, sous 54%↓56,9%
Dette publique fédérale américainehausse accélérée des coûts d'intérêt↑40 047 milliards de dollars
The France angleAn acceleration in the loss of confidence in the dollar would push global rates higher, including France's. ↓ Rather unfavorable for France.
Ordres de grandeur indicatifs pour les 3 scénarios ci-dessus, estimés avec l'information disponible à la publication et réévalués si la situation change — jamais des prévisions garanties. Learn more about our method →
Key takeaways
Is the dollar losing its status as the world's reserve currency, as US debt explodes and central banks buy gold at a record pace?
The dollar's share of global foreign exchange reserves fell to 56.9% in the third quarter of 2025, its lowest level since 1995, while US federal debt crossed $40.047 trillion on August 20, 2026, with $963 billion in interest paid over ten months.
Not really, at least not in the short term: the most likely scenario (50%) is a slow, continuous decline, comparable to that of the past 25 years, without a break or replacement by another currency — the dollar remaining dominant in 89% of global foreign exchange transactions.
Worth watching: the release of the next quarterly IMF COFER data, expected at the end of December 2026, which will confirm or not whether the decline below 57% continues.
Fairly negative
Our assessment of the impact for France: fairly negative.the stable scenario (50%) and the deteriorated scenario (20%) both weigh on global borrowing costs, against only a 30% chance of a favorable stabilization.
A quarterly IMF database (Currency Composition of Official Foreign Exchange Reserves) that tracks the currency breakdown of official foreign exchange reserves held by central banks around the world.
CIPS
China's cross-border payment system (Cross-Border Interbank Payment System), run by the People's Bank of China, which offers an alternative to the dollar-dominated SWIFT network.
Fed
The US Federal Reserve, the United States' central bank, which sets interest rates and the country's monetary policy.
