“De-dollarization” was a major market story in 2024 and 2025, not because it was true, but because it sounded plausible enough to scare people out of the most in-demand assets. The reality was much simpler. The US dollar remains the world’s global reserve currency because there is no fiat alternative.

The US dollar index is rising and global demand for US dollar assets soars because there is no better option in the fiat world. For a currency to be a world reserve asset, it needs to operate with ample liquidity, a transparent financial system, economic freedom, and independent institutions. People who do not understand money promote the fantasy that currencies with capital controls, opaque financial systems, and even exchange fixing can substitute the US dollar.

The world has not lived de-dollarization but a flight out of fiat currencies overall. In the fiat money system, the US dollar crown remains unchallenged.

Look at the price, not the narrative. The US Dollar Index (DXY), which measures the US currency against a basket of peers, especially the yen and the euro, has been rising recently and has remained strong in the past years, trading above its 15- and 20-year average rather than breaking down. A currency that is allegedly in terminal decline does not trade like a scarce asset in difficult times, where rallies coincide with every instance of global stress. It trades like the dollar did in the 1970s or early 2000s.

Behind the DXY’s strength lies a fundamental element. There is a global bull market in US assets. Foreign investors are not “escaping” the dollar system; they are embracing it.

The most recent data show record net purchases of long‑term US securities by non‑residents, taking combined flows into Treasuries, corporate bonds, and US equities to historic highs. This is not the pattern of a system that is being abandoned, but the evidence of a key asset class in a volatile world.

Foreign ownership of US government debt has climbed to record nominal levels, with overseas investors holding well over 9 trillion dollars of Treasuries, led by Japan, Canada, and the UK. Even after adjusting for inflation and issuance, the stock of foreign‑held US government paper is rising, not falling, as shown by Apollo Research.

The same pattern can be seen in equities. Foreign buyers have been accumulating US equities at a record pace. For all the talk of “de‑dollarizing” portfolios, the world’s savings are being recycled into US equities, the US bond market and the Treasury market.

The stock of dollar reserves has grown. Central banks today hold trillions of dollars in US-denominated assets, even as they diversify part of it into gold but not other fiat currencies.

When emerging markets borrow abroad, they mostly borrow in dollars. When corporations hedge, they do so in US dollars. When crisis hits, markets rush for dollar liquidity, not for baskets of roubles, rupees, and renminbi. The DXY’s behavior around every risk event is empirical proof of this. When things get tough, everybody wants dollars.

In 2025, foreign investors bought a net 1.6 trillion dollars of long‑term US financial assets, a record and a sharp jump from about 1.18 trillion in 2024, according to Reuters. Private investors, not just public institutions, led the net foreign purchases of US securities in 2025. In 2026, the figures show global demand is accelerating.

Between 2024 and 2025, total net foreign buying of US long-term assets rose by nearly 400 billion dollars, even as headlines were dominated by “sell America” claims, and in 2026, the data of the first three months shows a 10% increase over the same period last year.

Foreign holdings of US Treasuries reached a record 9.355 trillion dollars in November 2025, increasing by more than 100 billion in a single month and rising from roughly 6 trillion in 2018, with demand increasing by around 8% in 2026.

According to the IMF’s COFER data, the dollar’s share of allocated global FX remains at 56.7% in the fourth quarter of 2025, more than twice as large as the euro’s roughly 20% share and the renminbi’s minuscule 2% share.

No rival fiat currency is close to substituting the US dollar as the primary reserve asset when measured in either share or depth of underlying markets. There is no substitution or displacement.

SWIFT and BIS data show the dollar remains the global leader in invoicing, settlement, and funding in global trade and finance, with a share well above any competitor in cross‑border payments and FX turnover.

A recent “de‑dollarization” irony is that, while some emerging central banks have shifted a part of reserves into gold, their countries’ private investors have been increasing purchases of US dollar equities and credit, leaving net demand for dollar assets stronger, not weaker.

So why does the de-dollarization narrative refuse to die? Because it is emotionally and politically appealing. It promises a mirage of currency independence while retaining capital controls. Interventionists want to believe that there could be a form of world reserve currency where authoritarian governments retained capital and exchange controls. The de-dollarization narrative remains alive because it is a mirage that, in fantasy land, would somehow make socialism work.

The irony is clear. The louder the de-dollarization chorus becomes, the more attractive US dollar assets appear for global investors.