If you’ve attended any of our OUTLOOK events or listened to our SANDSTONE SPEAKS, you’ll know we’ve long spoken about the shift from a unipolar to a multipolar world order, and what that restructuring means for the U.S. dollar’s privileged position as global reserve currency.
While this transition has been in motion for years, recent geopolitical and macroeconomic developments have sharply accelerated its pace. In February 2022, we watched as the U.S. booted a G20 and former G8 member off the SWIFT system — an act that made other countries take note and start looking at alternative payment systems and currencies. We’re seeing international reserve managers diversifying away from U.S. long bonds. Increasingly, that means gold.
For the first time in over three decades, foreign central banks own more gold than U.S. Treasury bonds as a percentage of their reserves.
This chart shows a critical crossing point. One of the most important monetary shifts since the 1970s with the move away from a gold standard to a crude oil standard, the rise of the petrodollar (a trend that is now reversing!). The current is clear, and while the direction hasn’t happened overnight, it represents deteriorating confidence in the U.S. dollar.
A RARE DIVERGENCE: GOLD AND EQUITIES RALLY IN TANDEM
Gold recently surpassed $3,900 per ounce (as of October 1, 2025). As a security that yields no income or dividends, it’s the ultimate fear gauge, potentially signaling a loss of trust in the global financial system. Gold’s all-time high is particularly striking given the concurrent rally in global equities. Historically, the two asset classes have moved in opposite directions. A simultaneous surge captures the FOMO mindset of the last couple of years: don’t miss out on the AI run but sure flee to safety!
Central banks (the world’s "smartest money") appear to be hedging decisively. Their actions reflect unease over prolonged fiscal stimulus, Fed independence, and the long-term consequences of monetary expansion. The U.S. federal debt load continues to climb, while the concentration in a narrow set of mega-cap tech stocks leaves equity markets vulnerable to correction.
DE-DOLLARIZATION IN A FRAGMENTING WORLD
What does all of this mean? Foreign reserves are positioning for a multi-currency world where the dollar is no longer dominant. One where a reserve currency may not even be necessary, but that’s a conversation for another day. Different blocs are choosing instruments that best reflect their economic interests and alliances. Cross-border transactions increasingly occur in local currencies. Alternative payment systems are being adopted to reduce dependency on SWIFT, particularly among nations wary of U.S. sanctions. Gold, impervious to digital freezes, offers a form of neutrality.
Whether the eventual outcome is blockchain-based assets, gold, a basket of currencies, or something else entirely remains uncertain. What is clear is that the old system is under strain.
BOTTOM LINE
At SANDSTONE, we’ve long discussed the geopolitical and monetary shifts shaping this decade of transition. We’re preparing for, not predicting, the future. Remember, periods of dislocation present significant opportunities! As the world restructures, the winners and losers will be defined by strategic, risk-adjusted foresight.
If you’re looking for wealth management from a global perspective, we’d love to hear from you.