‘Different from anything in the past 80 years of dollar dominance’: U.S. sanctions spur a ‘paradox’ pushing allies away from American currency

The world’s de-dollarization push continues, but this time, it’s America’s allies who are pulling back from greenbacks. Canadian Prime Minister Mark Carney announced last week a $25 billion sovereign wealth fund to bolster domestic infrastructure, part of an effort to make Canada’s economy less dependent on the U.S. The move follows France’s withdrawal of all of its 129 tons of gold held in the Federal Reserve Bank of New York between July 2025 and January 2026. France, considered America’s oldest ally, instead replaced the gold with an updated bullion and stored it in Paris—making $15 billion from selling its old stockpile. Governor of the Bank of France Francois Villeroy de Galhau said the decision “was not politically motivated,” but the last time France repatriated gold was quietly between 1963 and 1966, fearing the U.S. mounting debt would result in a devaluation of the dollar against gold, which ultimately accelerated the U.S. ending the Bretton Woods system and the gold standard. Sana Ur Rehman, a EBC Financial Group market analyst, argued these actions are different from past efforts to de-dollarize because they are coming from the U.S.’s long-established allies. While sanctions and other policies have intended to sustain U.S. trade dominance or punish adversaries, Ur Rehman said those efforts are backfiring and hurting the U.S.’s relationship with key global confederates. “These are not the actions of enemies,” Ur Rehman wrote in a note published Tuesday. “They are the actions of allies and partners who have watched the United States weaponize the dollar-based financial system, and have quietly concluded they need to reduce their exposure to it.” “That shift,” Ur Rehman continued, “driven by allies rather than adversaries, is what makes the current moment different from anything in the past 80 years of dollar dominance.” De-dollarization has been happening for decades—greenbacks’ share of global foreign exchange reserves have fallen from 71% in