There was a time when the US dollar used to reign supreme. The world’s currencies would often be envious of the USD’s global repute and the positioning that the currency has emanated and practiced around the world. However, with the constant USD weaponization and sanctioning, the world is now at odds with the American currency. This has led the world to dump the USD, looking for alternatives to damage its prestige for the longest time. As the multipolar world continues to evolve, the concept has certainly taken a toll on the US dollar, with the currency’s forex reserves noting a rapid decline. But the real question is, will the USD lose its current stature soon?

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US Dollar Forex Reserves Are Declining: Should You Be Worried?

The US dollar is currently in a twist, facing major resistance as developing currencies continue to hammer the dollar. The USD’s weakening stance due to rapid de-dollarization has led the world to switch towards alternatives, favoring alternative assets like gold and Bitcoin. This has led the US dollar to note a sharp decline in its global forex reserves, showcasing how the world’s trust in the dollar is deteriorating and eroding.

The dollar’s foreign reserves have now dipped to 51%, down 13% in the last 25 years. This depressing development is a new toll for the dollar, with the aggressive US tariff regimes adding more pressure.

“The share of USD in reserves held in global FX reserves has dropped to 57.4%, the lowest it’s been in at least 25 years. 🚨 Meanwhile, gold has risen to its highest level over the same period.”

The share of U.S. dollar reserves held in global FX reserves has dropped to 57.4%, the lowest it's been in at least 25 years 🚨 Meanwhile, Gold has risen to its highest level over the same period. pic.twitter.com/Et92iCDWGG

— Barchart (@Barchart) May 10, 2025

Where Does the American Currency Stand 20 Years From Now?

As the world continues to dump the USD, with statistics showcasing a declining pattern, the dollar could shed another 13% in the next 20 years, with the currency’s foreign reserves standing at a meager 45% by the year 2040. If the rapid de-dollarization forces the market, then the worst-case scenario could lead the American currency’s FX reserves to stand at an all-time low of 39.3%.

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