In recent years, a major shift has been happening in the way countries manage their financial reserves. For decades, most nations kept the bulk of their wealth in U.S. dollars, government bonds, and other traditional assets. But now, something new is taking shape. Countries around the world are buying more gold than ever before, and at the same time, there is growing debate about whether Bitcoin should also play a role in national reserves. This raises an important question Are countries replacing Bitcoin with gold in their holdings or is something more complex going on
To understand what is really happening, we need to look at the reasons behind this surge in gold buying. Central banks, which are the financial institutions that manage a country’s money, have been purchasing gold at record levels since 2022. In fact, global central banks have bought over 1,000 tonnes of gold every year during this period, which is the highest sustained accumulation in modern history. This is not just a few countries doing this. It is happening across Asia, the Middle East, Africa, Latin America, and even Eastern Europe. The People’s Bank of China, the Reserve Bank of India, and the Monetary Authority of Singapore are among the biggest buyers. In the Middle East, countries like Turkey, Iraq, and several Gulf states are also adding gold to their reserves. In Latin America, Brazil, Mexico, and Peru are following the same trend. Even countries in Eastern Europe such as Poland, Hungary, and the Czech Republic are increasing their gold holdings.
The main reason for this gold rush is a desire to reduce dependence on the U.S. dollar. For many years, the dollar has been the world’s main reserve currency. This means that most international trade, loans, and financial transactions are done in dollars. But now, more countries are worried about the risks of relying too much on the dollar. One big concern is the risk of sanctions. If a country gets into a conflict with the United States or its allies, it could face financial penalties that block access to the dollar system. This happened to Russia after the Ukraine war, and it has made other countries think twice about keeping all their wealth in dollars. Another reason is the fear that the dollar could lose value over time. The U.S. government has been borrowing a lot of money, and its national debt has now passed $35 trillion. This huge debt means the government has to pay a lot in interest, which can crowd out spending on things like infrastructure and defense. Many investors and governments are starting to question whether the dollar will remain strong in the long run.
Gold is seen as a safe alternative because it does not depend on any single country or government. Unlike paper money, gold has no counterparty risk. This means that if a government or bank fails, gold still holds its value. Gold has been used as money for thousands of years, and it is still considered a reliable store of value today. When trust in fiat currencies erodes, people and governments turn to gold. This is why central banks are buying so much of it. They want to protect their wealth from financial instability, inflation, and geopolitical risks.
At the same time, there is a lot of talk about Bitcoin and other cryptocurrencies. Bitcoin is a digital asset that operates on a decentralized network, meaning it is not controlled by any government or central authority. Some people believe that Bitcoin could become a new kind of reserve asset, just like gold. In fact, a few countries have already started to buy Bitcoin. El Salvador made headlines by adopting Bitcoin as legal tender, and other nations are exploring the idea. However, most central banks have not yet added Bitcoin to their official reserves. The main reason is that Bitcoin is still seen as too volatile and risky for large-scale government holdings. The price of Bitcoin can swing wildly in a short period of time, which makes it hard for governments to rely on it for stability. Gold, on the other hand, has a long history of holding its value and is much less volatile.
Another factor is regulation. Many governments are still figuring out how to regulate cryptocurrencies. There are concerns about money laundering, fraud, and the potential for criminals to use Bitcoin for illegal activities. Some countries have banned or restricted the use of Bitcoin, while others are taking a more cautious approach. This uncertainty makes it difficult for central banks to treat Bitcoin as a mainstream reserve asset. Gold, by contrast, is universally accepted and has clear rules for ownership and trading.
Despite these challenges, Bitcoin is still gaining popularity among individuals and some institutions. In countries like India, the United States, Pakistan, Vietnam, Brazil, and the United Arab Emirates, a growing number of people own Bitcoin. In Saudi Arabia, about 12% of the population owns some form of cryptocurrency, and in Singapore, the figure is over 11%. Many of these people see Bitcoin as a way to protect their wealth from inflation, gain more control over their finances, and access new investment opportunities. However, most of this ownership is at the individual level, not the government level. Central banks are still much more comfortable with gold.
There is also a debate about whether Bitcoin and gold are competing assets or if they can coexist. Some experts argue that Bitcoin is the “digital gold” because it shares some of the same qualities as gold, such as scarcity and decentralization. Both assets are seen as hedges against inflation and financial instability. However, gold has a much longer track record and is more widely accepted. Bitcoin is still relatively new and untested in times of major crisis. For now, most central banks are choosing gold over Bitcoin, but that could change in the future as the technology matures and regulations become clearer.
Another interesting development is the rise of sovereign digital currencies and stablecoins. Some countries are exploring the idea of creating their own digital currencies, which could be used for international trade and settlement. Stablecoins, which are cryptocurrencies pegged to traditional assets like the dollar or gold, are also gaining attention. These innovations could blur the line between traditional money, gold, and digital assets. For example, a stablecoin backed by gold could offer the benefits of both physical gold and digital convenience. This could make it easier for countries to diversify their reserves without fully committing to Bitcoin or other volatile cryptocurrencies.
The trend of buying gold is not just about replacing the dollar. It is also about diversifying risk and preparing for an uncertain future. Central banks are no longer focused only on liquid, interest-bearing assets. They are now prioritizing diversification, sovereignty, and protection against financial system weaponization. This means that gold is becoming a key part of their strategy, but it does not mean that Bitcoin is being completely ignored. Some central banks are studying the potential of digital assets, and a few may eventually add Bitcoin or other cryptocurrencies to their reserves. However, for now, gold remains the preferred choice.
The impact of this shift is already being felt in the global economy. As more countries buy gold, the price of gold has risen to record highs. In 2025, gold crossed the $4,000 per ounce mark, and some analysts predict it could reach $5,000 by 2026 and even $10,000 by 2028 if current trends continue. This surge in gold prices reflects the growing demand from central banks and investors who are looking for safe assets in a time