A New York Federal Reserve study says the long-running decline in the U.S. dollar’s share of global official foreign exchange reserves does not amount to a broad, coordinated move by central banks to cut dollar holdings.

The research found that the dollar’s share of global official reserves fell from 64% to 56%, but said that decline was not evidence that central banks as a group were systematically moving away from the currency. Since 2015, the number of countries increasing their dollar assets and the number reducing them has been roughly balanced, according to the study.

Instead, the New York Fed said the change in the dollar’s aggregate reserve share was driven mainly by concentrated portfolio adjustments by a small number of large reserve managers. Between 2015 and 2019, two central banks accounted for most of the shift cited in the study. From 2019 to 2023, Mexico and Morocco also became significant contributors to those movements.

The study said reserve management for most economies still appears to be guided by conventional objectives. Those include meeting dollar liquidity needs, managing exchange rates and responding to shocks in funding markets, rather than pursuing an active strategy of avoiding dollar exposure.

The report also pointed to IMF data showing the dollar’s reserve share fell to its lowest level since 1995 in January. According to the New York Fed’s interpretation, that move was driven mainly by passive depreciation effects as the dollar weakened, not by large-scale sales of dollar assets by central banks.

Why It Matters

The findings cut against one of the more persistent macro narratives in global markets: that reserve managers are broadly and steadily abandoning the dollar. For crypto markets, that matters because de-dollarization claims are often used to support wider arguments about weakening dollar dominance, changing liquidity conditions and demand for alternative financial assets.

By separating valuation effects from active reserve reallocation, the study points to a narrower conclusion. Reserve composition is still changing, but the shift may be less systemic than headline reserve-share figures suggest. That distinction matters for interpreting central-bank behavior, dollar liquidity conditions and the macro backdrop that shapes sentiment across risk assets, including digital assets.