The world's largest sovereign wealth fund—Norway's Government Pension Fund Global (GPFG), managed by Norges Bank Investment Management (NBIM)—has proposed slashing the weightage of government bonds in its benchmark index from 70% to 50%, a move expected to cut its exposure to US Treasuries by approximately $80 billion. The proposal, outlined in a letter to Norway's Ministry of Finance, is far from an isolated event. It is the latest in a cascade of signals—from central banks offloading US debt to multiple nations repatriating gold reserves—that point to a growing crisis of confidence in the dollar-centric financial order.

Norway's sovereign fund shifts away from US Treasuries

NBIM's proposal would reduce global government bond allocations in GPFG's portfolio by about $106 billion, with US Treasuries bearing the brunt of the reduction: Their share of the fund's bond portfolio would drop from 34.1% to 21.9%. The fund, which manages $2.3 trillion in assets, said the shift would allow it to increase exposure to higher-risk bonds and diversify sources of risk premium.

Central banks accelerate US Treasury sell-off

Foreign central banks have been offloading US government debt at an accelerated pace. According to US Federal Reserve data, foreign official holdings of US Treasuries held in custody at the New York Fed have plunged by $82 billion since late February to approximately $2.7 trillion, the lowest level since 2012. Over 200 central banks and sovereign wealth funds participated in the reduction.

In Japan, the largest foreign holder, holdings fell to $1.12 trillion in June, down 2.3% month on month. China's holdings of US Treasury debt stood at $633.4 billion in June, down from $659.3 billion in May, remaining the third-largest non-US ⁠holder. China's holdings in June were the lowest since September 2008, when holdings tumbled to $618.2 billion, Reuters reported.

Multiple nations repatriate gold from the US

The Netherlands' central bank announced that it had moved 86 tonnes of gold from New York and Ottawa to London between March and August, cutting the share of its bullion held in New York from 31.3% to 18.5%. France's central bank has completed the transfer of 129 tonnes of gold from New York, bringing all 2,437 tonnes of its gold reserves to domestic soil.

Why the dollar faces a crisis of confidence

Soaring US debt is undermining fiscal credibility. The US national debt surpassed $40 trillion in August, according to data released by the US Treasury Department. The Congressional Budget Office projects net interest payments to exceed $1 trillion in fiscal 2026—about 19% of the federal revenue. 

At the same time, the weaponization of the dollar is eroding global trust. In 2022, the US and its allies froze some $300 billion in Russian central bank assets, a move that set a dangerous precedent and prompted nations to reassess dollar dependence. More recently, in August 2026, the US Treasury threatened to cut Iran off from the dollar system under "Operation Economic Outcast," reinforcing fears that the dollar has become a geopolitical weapon.

Meanwhile, alternative mechanisms are gaining momentum. The BRICS payment system is set for launch in 2026, with the bloc recently completing its first live test of "The Unit"—a blockchain-based digital settlement asset—for energy trade in the Gulf. The United Arab Emirates formally withdrew from OPEC and the OPEC+ mechanism on May 1, 2026, further loosening the petrodollar system.