Brazil has been steadily reducing its apparent exposure to US Treasuries. In mid-2019, US government bonds attributed to Brazilian residents totaled about $310 billion. By July 2026, that figure had fallen to $168 billion, a decline of roughly 45%. The number does not represent the central bank alone and is influenced by where securities are held in custody, so it would be wrong to conclude that the BCB itself sold that mountain of Treasuries over the period. Even so, it is a powerful symbol of a broader shift: Brazil is less concentrated in US assets than it was only a few years ago.
That change is much clearer inside the central bank’s own reserve portfolio. In 2018, about 90% of its currency allocation was in US dollars. By the end of 2025, the share had fallen to just over 70%. Gold, meanwhile, rose from 0.75% to more than 7%, while the renminbi, which did not feature in the portfolio in 2018, reached about 6%. This is not an abandonment of the dollar. It is a material reduction in concentration risk across currencies and issuers.
Geopolitics has made that shift more consequential. The central bank itself said that in 2025, amid greater “economic and geopolitical uncertainties,” it broadened diversification to reinforce safety and liquidity, increasing exposure to gold, the euro and the renminbi. The BCB has not linked that decision specifically to the United States, and there is no evidence that the shift was intended as political retaliation. But the backdrop has changed. Washington this year concluded that several Brazilian practices involving digital trade and electronic payments, tariffs, intellectual property, ethanol and other areas restricted US commerce, and imposed an additional 25% tariff on certain Brazilian goods. Pix, Brazil’s instant-payments system, became part of that dispute.
That distinction between cause and context is what makes the story interesting. Diversification began before the latest deterioration in bilateral relations, but the new tensions help explain why reducing concentration can take on strategic value. A country holding hundreds of billions of dollars in reserves does not need to conclude that US assets have become unsafe to decide that dependence on a single currency, a single market and a financial infrastructure over which another state exercises enormous influence may itself be a risk.
China offers the clearest parallel — though not an equivalent one. Beijing has reduced its Treasury holdings from more than $1.3 trillion at their 2013 peak to $618 billion in July, the lowest level since 2008, while increasing exposure to gold and other assets. The Financial Times notes that some of China’s exposure may be obscured by custody through financial centers such as Belgium and Luxembourg, another reminder of the limits of US holdings data. Brazil and China have very different relationships with Washington, but both illustrate the same reserve-management question: how much concentration risk is sensible in a more fragmented world?
None of this means the dollar has lost its central role. Brazil’s reserves still stood at a robust $360 billion at the end of 2025, up from about $330 billion a year earlier, and 72% of the currency allocation remained in dollars. Treasuries offer a combination of scale, liquidity and safety that gold, the renminbi or any other single asset cannot replicate. Brazil’s diversification is therefore a change in degree, not a break with the US financial system.
A future easing of tensions between Brasília and Washington — regardless of political changes in either country — could reduce part of the geopolitical premium attached to diversification. It would not, however, remove the financial case for it. The shift has already spanned different political cycles and has accelerated under a technical rationale centered on safety and liquidity. The test now is whether future portfolio reviews keep moving in the same direction or increase exposure to the dollar and US sovereign assets again. The latest friction with Washington did not create this trend. But it may have made the question behind it much harder to ignore: how much of a country’s financial safety net should remain concentrated in the financial system of a single global power?
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