The share of USD holdings as foreign exchange reserves decreased to 56.32% in Q2 2025, but 92% of that decrease was due to the impact of exchange rates, not changes in the central bank's portfolio. If adjusted for exchange rate effects, the share would only slightly decrease to 57.67%, indicating that most central banks still primarily hold USD.
The new COFER report from the International Monetary Fund (IMF) provides crucial information for crypto investors tracking macro trends. The data indicates that central banks continue to allocate USD consistently, even though the currency has fluctuated significantly in that quarter.
The IMF reveals that central banks worldwide hold USD despite the currency's decline.
The IMF's COFER dataset tracks reserve assets of 149 economies in USD in Q2 of 2025. Significant currency movements create the illusion of a major portfolio adjustment.
According to the report, the DXY index dropped more than 10% in the first half of 2025, which is considered the largest decline since 1973.
USD decreased by 7.9% against the euro and 9.6% against the Swiss franc in Q2. This change resulted in the proportion of USD reserves dropping from 57.79% to 56.32%; however, this decrease reflects the impact of exchange rates more than direct portfolio adjustments.
When adjusted with a fixed exchange rate, the proportion of USD reserves decreased by only 0.12% to 57.67%, indicating that the central bank made only slight changes to USD reserves this quarter and challenges the concept of global De-dollarization.
Similarly, the proportion of euro reserves appears to have increased to 21.13%, up by 1.13 points. However, this increase remains a result of the assessments of overall exchange rates.
When using a fixed exchange rate, the proportion of the euro also slightly decreased by 0.04 points, reflecting that central banks decided to reduce their euro holdings as well.
As a result, this analysis signals mild macroeconomic warnings to Bitcoin investors and other digital assets marketed as hedges against USD weakness. Central banks have not diversified away from USD, even as the currency has significantly depreciated this quarter.
The trend of phasing out USD is often mentioned as a factor that could push institutions to adopt crypto more. However, when looking at COFER data adjusted for exchange rates, these trends can be misleading if lacking the correct context.
The British pound itself seems to have an increased reserve proportion in Q2, yet this result is merely a consequence of valuation assessments, which obscures the actual decline in holdings. This finding suggests that individual investors should look beyond headline numbers to understand the real changes in liquidity as well.
IMF research helps each investor see a more accurate picture of monetary policy during volatile market conditions by distinguishing between actual policy shifts and temporary value changes. Crypto investors can better assess global macroeconomic trends.
Central bank reserve strategies and trends
Holdings of USD remained stable in Q2 of 2025, indicating that each central bank continues to rely on traditional currencies, even as digital assets gain more attention. The IMF emphasizes that changes in exchange rates are crucial for understanding reserve changes accurately.
Each central bank prioritizes liquidity, returns, and risks when managing reserves. The strong position of USD is linked to a deep market, high transaction benefits, and an already established system. These factors continue to pose hurdles that each type of digital asset must overcome.
The IMF's methodology shows how currency changes can distort reserve data. In Q2, nearly all reported changes in major currencies resulted from value swings, not actual portfolio rebalancing. Each central bank thus maintains a cautious stance amidst market turbulence.
These findings help individuals understand a new global trend that is changing the crypto market. Investors interested in phasing out USD as a catalyst for Bitcoin should reference figures adjusted for exchange rates.
