China has sold $101.9 billion worth of US Treasury securities in the past year, according to new data from the Treasury Department. This marks a decrease in China’s holdings from $869.3 billion in March of last year to $767.4 billion in March of this year. The country’s holdings have been steadily declining since reaching a peak of $1.31 trillion in November of 2013.

This trend comes as China is moving away from the US dollar in cross-border trade and as the BRICS alliance considers launching a digital alternative to the dollar. These developments have caught the attention of the Federal Reserve. During a recent conference on the global importance of the US dollar, Fed Governor Christopher Waller acknowledged that the role of the world’s reserve currency is evolving, but stressed that the demise of the dollar is exaggerated.

Waller highlighted the use of sanctions by the US as a factor in the dollar’s continued dominance. He also noted that if these sanctions and policies persist, the growing popularity of digital currencies and changes in cross-border payments could pose challenges to the dollar’s position. However, he emphasized that nations currently have few practical alternatives to the dollar, especially during times of global stress.

Despite the challenges, Waller believes that the dollar will remain the most widely used currency for the foreseeable future. He pointed out that the US’s use of sanctions and its position as a global financial powerhouse contribute to the dollar’s dominance. Waller’s comments reflect the evolving nature of the global economy and the ongoing changes in the world of finance.

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