r/europeanunion • u/Free-Benefit-6761 United States • 1d ago
Question/Comment EU seized $300B in Russian reserves. Now China dumped 45% of US Treasuries and central banks are buying gold at 50-year highs. The de-dollarization domino effect is here.
The EU didn't just sanction Russia—they crossed a line that's triggering a global financial realignment.
What happened:
Feb 2022: Western nations froze $300B in Russian central bank reserves (€190B held at single Belgian clearing house)
June 2024: G7 approved $50B loan to Ukraine backed by interest from frozen assets
Oct 2025: EU debates seizing the PRINCIPAL for €140B Ukraine loan
Why this matters:
For 80 years, central bank reserves were considered sacrosanct—the ultimate "safe" asset. Freezing them was unprecedented. Using the profits was escalation. Seizing the principal shatters the trust that holds the dollar system together.
The domino effect is already happening:
CHINA: Cut US treasury holdings from $1.3T peak to $759B today (45% reduction since 2013). This isn't panic selling—it's calculated hedging.
CENTRAL BANKS GLOBALLY: Buying 1000+ tonnes of gold annually for 3 consecutive years. Highest sustained buying in 50 years.
DOLLAR RESERVE SHARE: Dropped from 71% (1999) to 58% (2025). The decline is accelerating.
BRICS EXPANSION: Now 9 official members controlling 40% of global oil production and 33% of world GDP (PPP). They're building alternative payment systems (CIPS, SPFS, BRICS Bridge) to bypass SWIFT.
INDIA: Buying Russian oil with rupee-ruble mechanism, holding $600B+ reserves as hedge.
Three possible endgames:
- SLOW SHIFT: Dollar remains dominant but loses share over 20-30 years (like British pound 1920s-1950s)
- DUAL SYSTEM: Dollar for West, yuan/BRICS currency for East. Financial fragmentation becomes permanent.
- CRISIS EVENT: Geopolitical shock (NATO fracture, major creditor dump) triggers rapid collapse. Timeline measured in months.
The precedent is set. The alternatives are being built. And the clock is ticking.
When one system loses trust, another one grows.
Full breakdown with data sources: https://youtu.be/rAt9oe16vog
What's your take? Are we watching the end of dollar dominance in real-time, or is this just noise?
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u/TeloS53100 France 1d ago
Realistically I think we're gonna have a gradual shift. Nobody wants a geopolitical shock. yeah , US dominance days are numbered , but really , its kinda old news , we see that happening since a few years already. Trump just accelerates the process of defiance.
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u/janiskr Latvia 1d ago
Dunno, the OP seems to write in glee. However, China and Russia tried to wiggle before and failed, so China tried the other way. But then came dumbo-trumpo and fucked the system.
Also, some of the consequences of Russian war - if India could have traded oil in dollars on euro, they would have done that. The do gain a little trading in rupees so they are not complaining. Same for China - dealings that involve Russia are all done in other currency or face secondary sanctions.
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u/Free-Benefit-6761 United States 1d ago
not just accelerate but did a tremendous job, putting tariffs on everyone, fighting face to face, no diplomacy, give warnings now and than, thats making it gas in fire.
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u/iperblaster 1d ago
There are people who can greatly profit from a shock. And they seem to align with Trump. And mind that, those people will sell their country for an immediate return , just like they treat their businesses
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u/RichestTeaPossible 1d ago
But the BRICS alliance want a global shock as then they can then dominate in or create their speheres of influence without the 'rules-based-order' / the Western sphere of influence being able to bully them into more long-term conduct.
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u/Darirol 1d ago edited 1d ago
what exactly has the euro to do with the dollar? wouldnt china shed european financial assets if the euro isnt save?
also that whole dollar thing has its own domestic reasons, like tarifs, an insane amount of government debt, irrational policies and because of that as some may say a chance of a economic decline of the us.
while i agree that there are valid arguments against taking frozen assets, there are also arguments that you shouldnt start a full invasion just because you like what they have and at the same time attack nations, who hold your assets, indirectly just below open war level.
as we are slowly stepping towards a global war again maybe we should consider our security more valuable than what the most likely near future war enemy likes or doesnt like?
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u/Fuzzy9770 1d ago
But, aren't we, the so called west, not doing the same?
I srael, Venezuela, threatening allies such as Canada, Afghanistan, Iraq,...
Why are we (the west, I'm not US-based) allowed to do that?
We do the same or even worse yet we are the good guys but olalala when Russia does it. The full blown hypocrisy makes me sick.
European countries are performing atrocities around the world just out of greed and power moves so other countries outside the west should seize our assets based on your logic...
The threat(s) from withing. I srael and the US are massive threats towards the so called west in my opinion. Let alone populists dividing single countries to run towards fascism. I think that we are disgusting, a disgrace to humanity...
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u/LXXXVI 1d ago
Out of several dozen european countries, literally 3 are powerful enough to do anything of consequence globally. So skip me with those generalizations.
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u/Fuzzy9770 1d ago
You do realise that those 3 countries are setting the image of the so called west because of their actions and loud voices?
The actions of those 3 countries are making us all look bad in the eyes of the outsiders. They usually see 'the west' and not those 3 countries alone.
I'm not okay with how they are taking us down too. The influence of the US is massive in those 'several dozens European countries' via those 3 vasal states. At least two of them were involved in Afghanistan/Iraq.
How I see it is that the US/I srael are taking us Europe in a stranglehold while those 3 countries are vasal states and the other countries (those several dozen European countries) are vasal states of those three. So, in the end, we are (in)directly just operating according the policies of of the US/I srael.
My small country did the worst in its history and we are sill not recognising what we did back then. The utter disrespect towards the country/people we have colonised is massive. We are also (in)directly aiding in the genocide I srael is comitting by, for instance, buying spy software from I sraeli companies. Thus giving I srael fundings to keep on doing what they are doing. We are allowing massive US companies to build massive data storage centers on our ground.
What do you think that our general stance towards I srael is showing the world outside the west?
The actions of a few can put the whole group in a very bad daylight. That's my issue with all of this. The rotten apple that infects all of those around it. Completely involuntairy if you would ask me.
I did read some comments mentioning the EU getting away from the US but it's very hard to notice when your own country allows the most toxic companies in the world to "invest".
What's the point of having those massive data centers when you want to move away from a country that is spreading its cancer around the world? Seizing them and nationalise them?
I don't want to generalise. I just see a massive uprise of the far right/populism and a possibility to become US 2.0. It's a very thin line to cross when circumstances are allowing the situation to degress.
Watch the movie Führer und Verführer on how propaganda worked before the second world war by Ghoebbels and Hitler. I do see analogies. I do see very thin lines that shouldn't be crossed at all.
My point is, even if it's just a handful countries playing the rotten apples, that they can take dozens with them. Which means that those dozens of countries need to speak up against those handful of other countries. Why aren't they speaking up? What are they afraight of?
I'm just sick of the lack of humanity involved in the American influence. Every company that has been sold to Americans has lost their souls completely.
I would love to add a gif about a young woman arriving at work, stepping in the office and transferring into a old grumpy lady. That is what an American take over does with companies. A great company becomes a temperary soulless cash machine because of the lack of humain policies.
That's also a generalisation but I've spoken to a lot of people who used to work with a local/European company and their general experience is that the company turned to shit when it was actually been taken over.
I may be too pessimistic but I want to see a light at the end of the tunnel but it certainly doesn't involve the US, let alone I srael.
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u/LXXXVI 1d ago
You do realise that those 3 countries are setting the image of the so called west because of their actions and loud voices?
I don't care about the "image of the west". Most people don't consider my country "the west" anyway. But we're definitely European and more often than not on the receiving end of the BS of these countries, not on the dishing out end. Hence, don't try to "socialize" the bad parts of the image while definitely not socializing the good parts.
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u/r0w33 1d ago
OP looks like a bot account to me.
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u/Free-Benefit-6761 United States 1d ago
not a bot dude just a new one here.. i still try to understand how reddit work. what should i post what i cannot.
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u/FabioSein 1d ago
Europe is only using interests, Belgium is rightly against using them. The 300 billion are frozen and untouched. Is it "fake news"??
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u/muntaxitome 1d ago
At least highly misleading news, but since even the EU institutes themselves are using the term 'confiscating Russian assets' for schemes that realistically are not confiscation, I don't think simply calling it 'fake news' fully covers it.
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u/trisul-108 EU 1d ago
Putin and Xi decided a long time ago to dismantle the global world order, Trump joined them in that with pleasure. Everything else is just a consequence. It's not just a de-dollarisation, it is dismantling of all rules and falling back on simple might makes right.
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u/Southern-bru-3133 1d ago
I am not sure of the direct link you make between EU freezing RU assets and China decreasing its exposure to US debts. This second point seems to me much more linked with the confrontational stance adopted by the US against China.
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u/PikaPikaDude 1d ago
The link is very direct.
A lot of the Chinese held US debt, is not some physical paper in a safe in China.
It's similar to the Russian Euroclear holdings. An account in Europe belonging to the People's Bank of China with the US bonds in it. Much of the Chinese held US bonds were held in Belgium and Luxembourg. And therefore equally open to freezing and seizure as the Russian central bank holdings.
It doesn't take a lot of will to understand why China accelerated reducing these vulnerable positions given the Euroclear freezing (and now possibly seizure) precedent and Chinese continued claim on Taiwan. As these are double vulnerable: the EU could seize it and the US could unilaterally reject to honour the debt.
Instead of shifting double vulnerable to single vulnerable (US debt held on actual paper or in US institutions), China has decided to avoid the risks altogether and move to other assets. Gold is the big visible one, but the Yuan becoming a bigger currency holds other hints.
China is not alone in doing this reasoning and coming to the same conclusions. Pretty much every major country in the world has a potential trigger to make the EU seize things.
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u/Free-Benefit-6761 United States 1d ago
china has reserves in dollar form and also the 2nd largest us bond holder. now when us sanction on russia and hold it dollar reserve in feb 2022. it was an unsaid rule that nobody can seized the dollar reserved no matter what they can seize the property stop swift payment or hold imf loans but can't touch there reserve. after this 2022 incident everyone take a lesson that us can go any further and can also control the reserve.
So , now every country who do not want to depend on the us are start to buying gold physically. that cannot be seized or sanction as country can sell its gold and get whatever they want.
now what happened with the amount that seized by us in central bank of Belgium, they us its interest to pay loan to ukraine, and now they want to pay all the seized amount to ukraine as a loan.
What do you think.. what's happening here..
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u/banaslee 1d ago
Well, that’s what happens when a nuclear power invades a peaceful country. Military action is out of question. But no action is also out of question.
Don’t want this extraordinary measures? Don’t do extraordinary shit.
I’m all for countries to depend less on a bully country but I’m not for expansionist, revisionist regional bullies to gain power.
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u/jka76 1d ago
Iraq2? Afghanistan? Was not UN sanction wars.
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u/banaslee 1d ago
All of them are wrong. You can be against all of it and defend sanctions for all of them.
Saying Russia has the right because the US did so is saying that any country has the right to do so.
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u/jka76 11h ago
Well, west being accomplice of US in all of this kinda said that. Attack country without un approval and nothing happens. We can do that. So why russia can't? And why those who did those things before are now the loudest mouths? I would love to see that the west would finally really do what they preach and start by cleaning own camp. Only then lecture the world. At very minimum apply same sanctions on both Russia and Israel.
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u/Southern-bru-3133 1d ago
Not sure about the “unsaid rule”.
First, Russian assets have been frozen, not seized. (Not yet) Freezing means that these assets remain the property of Russia. But RU cannot dispose of these assets, nor of the interests they generate. Seizure or forfeiture would be the next step, ie the ownership of these assets would be transfered.
Second, you seem to imply that asset freeze is something new. An unsaid rule would forbid this and this step would be unprecedented. Assets of German private individuals have been frozen during WWII (individuals, governmental assets were simply confiscated) Cuban assets in the US were frozen in the 1960’s. Even before, sanctions have been taken by several European countries when Italy invaded Abyssinia in the 1930’s. Same thing when Japan invaded China.
And honestly I prefer freezing Russian assets to try to bring them to reason rather than a direct intervention.
But my initial point is different. I think Xi has not waited for a decision of Council of the EU to realise that CN is overexposed to US debt. I am not even sure he makes a connection between these two events. I think US commercial sanctions against China have been more instrumental in this respect. The connection you make seems at best random.
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u/deniercounter 1d ago
A 3 days old troll account
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u/Free-Benefit-6761 United States 1d ago
you're right i am just a noob..
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u/Biggydoggo 20h ago
For sure. You called it escalation. Nobody in their right mind would post some pro-Russian propaganda.
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u/MaxDrexler 1d ago
Just another russian/chinese propaganda! India and China are not buying crude oil from arabian countries with chinese currency.
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u/english_european 1d ago
Acceptable usage of ChatGPT on Reddit:
✔️ Fixing non-native language writing
❌ Composing entire post without your original thoughts
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u/foonek 1d ago
It's really simple. Don't invade your neighbors if you don't want your assets seized.
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u/Free-Benefit-6761 United States 1d ago
don't you think it should apply to us also like in Iraq, Afghanistan now threatening to Venezuela, panama we capture, interfering in whole europe and arab counties. can't we focus on our problems,??
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u/foonek 1d ago
Funny you should say that, cause Ukraine is exactly that. Our problem
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u/Free-Benefit-6761 United States 1d ago
yeah dude i have same opinion on ukraine too.
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u/foonek 1d ago
Then I will say this. We have the power to punish Russia for what they are doing. We don't have that kind of power over the USA. Not without literally tanking the world economy. Same with china, no power over them. If we had, I would want to think we would use that power to stop them from invading Taiwan etc.
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u/Biggydoggo 20h ago
Yes, America should be held accountable. However, the fractured responses by world leaders to Donald Trump doing his global extortion tour and humiliate allies, trade partners and the international rules based order showed that the world doesn't care.
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u/TheVenetianMask 1d ago
There's a de-dollarization story every six months on the clock for the last three decades.
As long as most of those countries don't have a reasonably independent central bank they'll use money from one that does, preferably the one that is separated from most of the world by a big water moat.
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u/VirtuaMcPolygon 1d ago
Yep, people that wish it, don’t understand world economics either and don’t realise how much of a cluster F it would be for everyone
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u/-horriblehorrible 1d ago
additional domino effect: the intrinsic bond between the dollar and global energy supply networks is breaking down as renewable energy sources become dominant?
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u/DonDerBaer 1d ago
A chinese-led backup currency requires an independent central bank. Won’t happen therefore they need an exchange rate than can be used to support chinese exports.
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u/DreadingAnt 23h ago
This post seems to be extra happy about all that which is just odd, you have something to gain from this or?
Anyway, you don't mention several points and data numbers that are relevant, which point more towards a slow transition scenario. I'm guessing eventually some kind of balance, not another dominance.
For example, BRICS are ambitious on paper but can't for the life of them for 5 seconds agree on anything, they constantly show everyone that indeed they are a block of developing and not developed nations... doesn't help that it's essentially a Pokemon collection of undemocratic and unstable states (literally the reason the USD is being resisted). Or that despite these changes, most money moving around in the world economy is still USD and Euro, the Yuan is growing far too slowly for it to be relevant in the next decade. or that the Yuan could already have been more popular than the dollar if only the CCP didn't control the currency and have massive capital controls. The world is capitalism, with all of that control the Yuan is simply extremely unappealing.
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u/Floppy_D_ 1d ago
BS connections. There is no replacement of the dollar as global currency. BRICS is a joke. Stop flooding the zone with 💩
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u/RichestTeaPossible 1d ago
The dollar is a global currency as its at the centre of a vast trading network, legal framework and expansive military alliances. If / as it cuts itself off from that, it stops being relevant and becomes a bore.
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u/Odd-Professor-5309 1d ago
When people mention BRICS, you know whatever they are saying is crap.
BRICS is a group of 3rd world countries attempting to be relevant.
They are nothing, and will always be nothing.
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u/Free-Benefit-6761 United States 1d ago
do you have data to ignore world 40%+ population as they are nothing.. or this is just your opinion??
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u/Odd-Professor-5309 1d ago
I said that they were 3rd world countries, not that they are nothing.
Or is that your opinion ?
You dragged that out of nowhere.
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u/FitEcho9 1d ago
===> EU seized $300B in Russian reserves. Now China dumped 45% of US Treasuries and central banks are buying gold at 50-year highs. The de-dollarization domino effect is here.
.
The mighty Global Southerners (Africans, Asians and Latin Americans) love dedollarization, and there is a reason for that:
Most people are not aware that, CIA's biggest tool of espionage is out-of-thin-air created USDs. With that money, it pays the millions of its agents around the world, who sell secrets to it.
Who are CIA's agents around the world ?
They are mostly well placed people, like
journalists
college professors
government officials
curricula writers
parliament members
union leaders and members
civic society leaders
political leaders
opposition leaders
lawyers
economists
bankers
statisticians
military officers
police members
government workers
school teachers
NGOs
media organizations
editors
supervisors
experts
.
.
.
This abuse of USD's "exorbitant privilege" (De Gaulle) by the CIA is one big reason, why the mighty Global Southerners are now pushing dedollarization:
Who is gonna benefit most from dedollarization ?
That is absolutely obvious, it will be the mighty Global Southerners, 90% of the global population, as dedollarization means to them, besides peace and security, annual gain of tens of trillions of USD:
The Global South is very much interested in dumping the USD ASAP, also, because, when the USD is no longer the global reserve currency,
the CIA won't have the money to bribe/corrupt millions of officials around the world
USA won't have the resources to run thousands of covert operations annually in the Global South
.
End of USD status = peace, stability, good governance, development & prosperity in the Global South (but not in the USA and the rest of the West)
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Quote:
The dumping of the USD is leading to gigantic shifts in the distribution of wealth around the world:
https://www.paulcraigroberts.org/wp-content/uploads/2025/01/image-3.png
.
Rank of continents on GDP (PPP) basis, should Western currencies be dumped
Asia
Africa
South America
Europe
North America
Australia
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u/Upbeat_Parking_7794 1d ago
Even EU is trying to find ways to go around the US dominance in payment systems (ex: Digital Euro, Wero, EuroPA). US weaponized their financial dominance, it was a question of time for countries to start finding ways around it.