Is China Stockpiling Gold to Turn the Yuan Into a Global Reserve Currency?
By Felix Ng – APAC Editor, Cointelegraph Magazine
Executive summary
- The United States has enjoyed near‑universal use of the dollar in trade and as the world’s primary reserve for more than eight decades.
- Beijing has repeatedly voiced a desire to see the renminbi (RMB) become a “strong, widely used” international currency.
- Official statistics list China’s official gold holdings at roughly 2,300 t —the sixth‑largest sovereign stash. Independent analysts, however, argue the true figure could be 5–7 kt or even higher.
- If China’s gold cache is indeed far larger than reported, the metal could serve as a tangible backing for a yuan‑centric monetary system, potentially eroding the dollar’s dominance over the long term.
1. Why the yuan matters to Beijing
Since the early 2000s, Chinese policymakers have pursued a “de‑dollarisation” agenda aimed at reducing reliance on U.S. Treasury securities and the greenback in cross‑border transactions. President Xi Jinping recently reiterated this goal in a Qiushi magazine essay, emphasizing the need for a “strong currency … with the status of a global reserve.”
A yuan‑centric system would give China more strategic autonomy, lower exposure to sanctions, and increase the influence of the nation’s financial markets.
2. The gold angle – official vs. independent estimates
| Source | Reported gold holdings | Independent estimate |
|---|---|---|
| People’s Bank of China (PBoC) – end‑2025 | 2,306 t (6th globally) | — |
| Money Metals Exchange (Jan Nieuwenhuijs) | — | 5,411 t |
| Bloomberg (Jan 2026) | — | 5,300 t‑plus, based on purchase data |
| Dominic Frisby (financial writer) | — | 7,300 t – 16,000 t (range) |
The discrepancy stems from the opaque way China acquires and stores gold. Purchases are often routed through the Shanghai Gold Exchange (SGE) or offshore channels, making real‑time tracking difficult. Analysts note that the PBoC has been buying gold every month for the past 14 months, even as prices hit record highs, suggesting a deliberate, low‑profile accumulation strategy.
Production and imports amplify the picture
- Domestic mining: Since 2013, China has produced roughly 4,800 t of gold, averaging 380 t per year, with more than half of the mines state‑owned.
- Imports: In 2024, China imported about 1,225 t of gold, mainly from Switzerland, Canada and Australia, often transiting through Hong Kong.
Combining mining output, imports, and historic SGE withdrawals (≈1,800 t yr⁻¹ since 2015) leads some analysts to a “reasonable” estimate of 5‑6 kt of gold under state control—double the officially reported amount.
3. How gold could support a yuan reserve
Historically, the U.S. dollar’s ascendancy was cemented when it was backed by gold under the Bretton Woods system. Although that peg was abandoned in 1971, the perception that a currency is “backed by something real” still influences confidence.
If China were to disclose a substantially larger gold reserve, it could:
- Provide a tangible anchor for the renminbi, reassuring foreign central banks and investors.
- Enable a gradual shift in sovereign reserves from dollars to yuan‑gold assets, especially among BRICS and other dollar‑exposed nations.
- Create a strategic bargain chip that could be revealed during a geopolitical crisis to boost the yuan’s credibility.
Charles‑Henry Monchau (CIO, Syz Group) argues that converting surplus dollar assets into gold is a “quiet, cumulative tactic” that subtly weakens the dollar without triggering market panic.
4. Implications for cryptocurrencies
A potential gold‑backed yuan could reshape the broader “digital‑money” ecosystem:
- Store‑of‑value competition: Gold and a gold‑backed yuan would vie with Bitcoin and other digital assets for the role of hedge against fiat inflation.
- Liquidity corridors: Should the yuan gain reserve status, Chinese authorities may promote digital yuan (e‑CNY) usage in cross‑border settlements, potentially intersecting with crypto‑friendly platforms.
- Investor sentiment: Analysts such as Robert Kiyosaki and Dominic Frisby have already recommended diversifying into gold and Bitcoin as “non‑government money.” A credible gold‑backed yuan could intensify that narrative.
5. Risks and unknowns
- Transparency – China’s reluctance to disclose exact gold holdings makes policy forecasting difficult.
- Market reaction – A sudden “gold reveal” could cause volatility in both precious‑metal and foreign‑exchange markets.
- International acceptance – Even if the yuan is gold‑backed, sovereigns may be reluctant to replace the dollar without clear, stable mechanisms for conversion and settlement.
Jeff Currie (Carlyle) notes that China’s current gold buying appears part of a “de‑dollarisation strategy,” but he cautions that turning that into a full‑scale reserve shift would require broader institutional confidence.
Key takeaways
- China’s official gold reserves are modest (≈2.3 kt), but independent analysts estimate the true stock could be 2‑3 times higher.
- A sizable, covert gold accumulation aligns with Beijing’s long‑term goal of elevating the yuan to global reserve status.
- Gold purchases serve as a low‑profile way to reduce dollar exposure while building a tangible asset base.
- If disclosed, a larger gold reserve could give the renminbi a credibility boost comparable to the historic gold‑dollar link, potentially reshaping reserve holdings and prompting shifts in crypto market dynamics.
- Uncertainty remains due to China’s opacity, the pace of international adoption, and the geopolitical context that could trigger a “big reveal.”
The analysis draws on recent statements from Chinese officials, data from the World Gold Council, Bloomberg, Money Metals Exchange, and commentary from market observers such as Dominic Frisby, Jan Nieuwenhuijs, Charles‑Henry Monchau, and Jeff Currie.
Source: https://cointelegraph.com/magazine/china-stockpiling-gold-yaun-global-reserve-us-dollar/?utm_source=rss_feed&utm_medium=feed&utm_campaign=rss_partner_inbound
