According to CoinDesk, Bitcoin's share in international transactions reached a decade high in 2023, while foreign holdings of U.S. government bonds remained steady, according to a note from Credit Agricole. Despite the growing importance of Bitcoin, the U.S. dollar (USD) continued to be the most favored currency in international transactions, with global demand for U.S. government bonds holding steady.
The USD's share in international SWIFT transactions surged in 2023 to reach its highest level in more than ten years. Credit Agricole's G10 FX strategy team noted that the growing importance of the USD as the currency of choice for international payments and transactions is another reason for global official and private investors to buy the currency. This, in turn, should slow down any push towards de-dollarization.
The USD's share in foreign exchange reserves maintained by central banks worldwide held steady at 59% in 2023, the same level as the previous three years, citing data tracked by the International Monetary Fund. The euro's share dipped to its second-lowest since 2017. Concerning trends in foreign investment in U.S. Treasury bonds, the note said that non-Asian nations compensated for the decline in China, Hong Kong, and Japan's holdings in 2023, keeping the global tally steady. Credit Agricole concluded that expectations of aggressive unwinding of USD holdings are quite premature and that the U.S. dollar is likely to remain the currency of choice or haven asset during times of stress, sucking money from other assets like Bitcoin and stocks.
