Central banks favor gold over US Treasuries

TLDR

Central banks are gradually shifting part of their reserves from US Treasuries into gold, reflecting deeper worries about sanctions, debt and long-term dollar risk.

1. Recent data show official gold holdings have overtaken foreign US Treasury holdings in value, after several years of record central bank gold buying.
2. The main driver is not short-term speculation but concern about sanctions, US fiscal risks and the fact that Treasuries can be frozen while gold cannot.
3. For crypto, this validates the demand for asset-without-counterparty reserves, but gold remains the core official hedge while Bitcoin still plays a mostly market-driven, not central-bank, role.

Deep Dive

1. Evidence Of The Shift

Analysis of reserve data cited by multiple research groups indicates that central banks now hold over 4 trillion dollars worth of gold, versus about 3.9 trillion dollars in US Treasuries held by foreign governments, a first in modern history. One breakdown puts gold at 24% of reserves and Treasuries at 21%, compared with 9% and 33% respectively in 2015, showing a clear multi-year rebalancing toward bullion and away from US debt.

This is backed by flows. Central banks bought about 863 tonnes of gold in 2025, with World Gold Council estimates suggesting total official demand above 1,000 tonnes once unreported purchases are included. February 2026 alone saw a net 19-ton increase, and the Peoples Bank of China has reported a 16?month streak of gold additions.

Survey work among reserve managers shows nearly three quarters of central banks now hold gold, and almost 40% are considering increasing exposure in coming years, reinforcing that this is a structural policy choice, not a short-term trade.

2. Why Gold Beats Treasuries (For Them)

The biggest change is how reserve managers view political and sanction risk. After the 2022 freeze of roughly 300 billion dollars in Russian reserves, several analysts describe gold as the asset that cannot be frozen, while Treasuries and other dollar or euro bonds are now seen as exposed to foreign policy decisions.

Studies of reserve composition show foreign US Treasury holdings peaking around 3.1 trillion dollars in 2021 and sliding toward 2.7 trillion, while gold steadily climbs. A 20242026 central bank survey found geopolitical tension has become the top risk for almost 70% of respondents, and confidence in US bonds future outperformance has dropped sharply.

At the same time, high US debt, interest-rate volatility and past drawdowns in long-duration Treasuries make mark-to-market losses more visible, while gold is treated as a hard collateral buffer that is politically neutral and usually stored domestically.

3. Implications For Bitcoin And Crypto

This shift supports a broader move toward reserve assets with low counterparty and sanctions risk. A recent policy paper on sovereign reserves argues that traditional criteria like liquidity and stability should be complemented by access risk, noting that gold can be physically stranded and dollar reserves can be frozen, while Bitcoin is globally transferable as long as the network is online.

However, central banks are not yet replacing gold with Bitcoin. Gold is deeply embedded in reserve frameworks, has far lower volatility and established accounting treatment, while Bitcoin still trades like a high-beta macro asset with large drawdowns. Official adoption so far is limited to a few small states and a US strategic stash of forfeited coins, not broad central bank portfolios.

For crypto investors, the key takeaway is narrative, not immediate flows. The same concerns that push central banks from Treasuries into gold also strengthen the long-term case for scarce, censorship-resistant assets, but Bitcoins path into reserves is likely to be slow, incremental and politically contentious.

Conclusion

Central banks increasingly tilt reserves toward gold and away from US Treasuries to manage sanction, geopolitical and debt risks, while keeping Treasuries for liquidity. That shift entrenches golds role as the primary sovereign hedge and indirectly validates the demand for non?politicized stores of value. For crypto users, it signals a world where concerns that underpin the digital gold thesis are real, even if gold, not Bitcoin, is currently where central banks express them.