Significant Changes in Foreign Exchange Reserves Structure
According to the latest data from the Swiss National Bank, as of the end of June 2025, the total foreign exchange reserves have exceeded 1 trillion dollars. The share of dollar holdings has dropped to 37%, the lowest in recent years, while the euro's share has risen to 39%, becoming the largest reserve currency. This change is seen as a significant signal of the global de-dollarization trend and reflects the central bank's effort to gradually seek balance in asset allocation amid a complex international political and economic environment.
As the world's third-largest foreign reserve management institution, the actions of the Swiss Central Bank carry a strong demonstrative effect. Market analysts believe this move is not a short-term adjustment but a long-term strategic consideration to reduce dependency on the risk of a single currency.
Increasing Political and Trade Frictions
This adjustment is widely associated with the policy orientation of the Trump administration. Since this year, the United States has introduced high tariff policies, making Switzerland one of the most affected developed economies with a tariff rate as high as 39%. This has not only increased the export costs for Swiss companies but also compelled the Swiss Central Bank to rethink its reserve currency configuration.
Analysts have pointed out that the credibility of the dollar is being questioned due to the expansion of the US fiscal deficit and policy uncertainties, prompting central banks worldwide to accelerate their diversification in reserve holdings. Switzerland's stance is a response to this global trend.
Balancing Interest Rates and Monetary Policy
It is worth noting that the Swiss Central Bank remains cautious about interest rate cuts. Although the current policy rate is near zero, the management has made it clear that the costs of entering negative interest territory are higher, and they will not easily resort to further easing.
Meanwhile, the strong performance of the Swiss franc is adding to the policy dilemma. Since the beginning of the year, the franc has appreciated over 12% against the dollar, driven by demand for safe havens. However, this also exerts significant pressure on the export industry, compounded with high tariffs, undermining the competitiveness of Swiss companies in the international market.
Cautious Stance on Gold and Cryptocurrencies
Regarding the diversification of reserve assets, the Swiss Central Bank has maintained a stable gold holding at around 1,040 tons, ranking seventh globally. The vice president has clearly stated that there are no plans to increase or decrease gold holdings, as it still plays a strategic stabilizing role in overall allocation.
As for cryptocurrencies like Bitcoin, the Swiss Central Bank remains conservative, viewing them as highly volatile and uncertain, not yet meeting the standards for central bank reserve investments. This stance somewhat cools the market and reflects the cautious position of mainstream central banks on digital asset allocation.
Accelerated Transformation of Global Reserve Patterns
A previous report from the European Central Bank has shown that the dollar's share in global foreign exchange reserves continues to decline, falling by two percentage points in 2024 alone. Although the dollar remains the primary reserve currency, its share has decreased by 10 percentage points in the past decade. Simultaneously, the status of currencies like the euro, yen, and Canadian dollar has improved.
The underlying cause of this trend is global central banks' concern over the fiscal stability of the United States. International rating agencies have downgraded the US sovereign credit rating, further intensifying doubts about the long-term attractiveness of the dollar. If the US fiscal deficit continues to expand, the de-dollarization process may accelerate.
Conclusion
The reduction of dollar holdings and increased allocation to the euro by the Swiss Central Bank marks a subtle reshaping of the global reserve currency landscape. Political risks, fiscal deficits, and international trade frictions collectively drive central banks towards greater diversification. While the dollar's dominance may not be challenged in the short term, its prevailing advantage is showing signs of loosening. For global markets, this suggests the formation of a more complex and multipolar currency system.
