The share of the US dollar as a global reserve currency declined to 56.32% in the second quarter of 2025, but 92% of that decline was due to exchange rate fluctuations rather than changes in central bank portfolios. The real decrease after exchange rate adjustments is a slight reduction to 57.67%, indicating that central banks have largely maintained their US dollar holdings.
The International Monetary Fund (IMF) report on the new official foreign exchange reserve currency composition (COFER) provides important insights for cryptocurrency investors tracking macroeconomic trends. This data reveals that despite significant exchange rate fluctuations during the quarter, central banks have maintained a stable dollar allocation.
IMF national central banks maintain dollar assets even after declines.
The IMF's COFER dataset tracks currency reserves of 149 regions in US dollar terms. In the second quarter of 2025, there seemed to be significant portfolio reallocations due to fluctuations in major currencies.
According to reports, the DXY index fell by over 10% in early 2025, marking the largest decline since 1973.
The US dollar fell by 7.9% against the euro and 9.6% against the Swiss franc in the second quarter. As a result, the dollar reserve share decreased from 57.79% to 56.32%. However, this decrease was due to exchange rate factors, not aggressive asset reallocation.
Assuming constant exchange fluctuations, the dollar reserve share decreased by just 0.12 points to 57.67%. This indicates that central banks largely maintained their dollar reserves during the quarter, casting doubt on the narrative of "de-dollarization."
Similarly, the euro's reserve share appears to have risen to 21.13%, but this is also entirely due to exchange valuation.
When viewed at a constant exchange rate, the euro's share shows a slight decrease of 0.04 points, indicating that central banks actually reduced their euro holdings.
This analysis serves as a limited macro signal for digital assets seen as hedges against the decline of the US dollar, such as Bitcoin. Central banks did not move towards asset diversification even during significant dollar depreciation.
The trend of de-dollarization is often cited as a factor for institutional investment entering cryptocurrency; however, viewing COFER data after currency adjustments can lead to misunderstandings without precise context.
The British pound also appeared to see an increase in reserve share in the second quarter, but this was also due to exchange valuation, and actual holdings had decreased. Investors should understand the reasons for true liquidity changes, not just apparent figures.
The IMF survey helps to more accurately grasp monetary policy during market volatility periods. By distinguishing between actual policy changes and temporary valuation fluctuations, cryptocurrency investors can evaluate global macro trends more accurately.
Central bank foreign currency reserve strategies and outlook
In the second quarter of 2025, dollar holdings remained stable. Even as attention focuses on digital currencies, central banks still rely on traditional currencies. The IMF emphasizes that exchange adjustments are essential for interpreting reserve fluctuations.
Central banks prioritize liquidity, returns, and risks in managing reserve assets. The strength of the dollar is supported by deep markets, transaction convenience, and advanced infrastructure, which are challenges that digital assets must overcome.
The IMF's methodology clarified how exchange fluctuations distort reserve data. The fluctuations of major currencies in the second quarter were due to valuation changes, not actual asset reallocations. Central banks maintained a cautious operational stance even during market turmoil.
These insights help in understanding the global trends shaping the cryptocurrency market. Investors interested in dollarization as a catalyst for Bitcoin should focus on exchange-adjusted figures.
