The World Is Rewriting the Rules of Money—And Neutrality Is Winning

The United States has long been considered the anchor of global financial stability, with Treasuries serving as a primary form of collateral and the U.S. dollar acting as the world’s reserve currency. However, recent developments indicate a shifting sentiment among investors and central banks, signaling a re-rating of the global financial architecture. This transition is being driven by the increasing demand for what is being labeled as “neutral reserve assets”—assets that are not subject to manipulation or control by any single government.

One of the key indicators of this shift is the pressure on long-dated U.S. government bonds. The yield on the 30-year U.S. Treasury bond has climbed to near 5 percent, a level not seen in years. According to the New York Fed’s ACM model, the 10-year term premium has also risen to levels not seen in more than a decade. This increase is attributed to a combination of massive bond issuance and growing uncertainty in the global economy. The U.S. is projected to borrow over $1 trillion in the third quarter of 2025 alone, highlighting the scale of its financial commitments. Despite a weaker labor market—evidenced by a rise in the unemployment rate to 4.3% and fewer job openings than unemployed workers—bond yields have remained elevated due to the sheer volume of supply.

Simultaneously, gold has reached record highs, trading above $3,640 per ounce. Central banks, including the People’s Bank of China, have continued to add gold to their reserves, with purchases now exceeding those seen since the 1960s. This trend is supported by ETF inflows, with nearly $4 billion entering gold-linked funds in a single week in August. The appeal of gold lies in its neutrality; it cannot be printed, sanctioned, or devalued by any government, making it a universally accepted asset in an era of geopolitical and economic uncertainty.

The geopolitical landscape further reinforces this trend, as the Shanghai Cooperation Organisation (SCO) and the broader BRICS group work to establish non-dollar payment rails. At the recent SCO summit, China proposed a new development bank and encouraged the use of national currencies in trade settlements. While these efforts are unlikely to replace the dollar immediately, they are steadily eroding its monopoly in global finance. Gold is increasingly seen as a bridge asset for central banks seeking alternatives to the U.S. dollar until more robust systems are established.

In the realm of digital assets, Bitcoin and other cryptocurrencies are also gaining attention as potential neutral reserve assets. Although central banks have not yet integrated Bitcoin into their official reserves, some private investors and financial institutions view it as a hedge against political and institutional risk. The U.S. government has also shown interest in digital assets, with legislation such as the GENIUS Act creating a regulatory framework for stablecoins. Meanwhile, Russia and other countries are exploring the use of stablecoins and digital assets for cross-border transactions, further complicating the global financial landscape.

The broader implications for investors suggest that the rise of neutral reserve assets represents a structural shift rather than a temporary market fluctuation. Long-term investors are demanding higher returns on U.S. bonds due to growing fiscal uncertainties and policy risks. Gold’s recent performance is not a passing trend but a reflection of sustained demand from both central banks and private investors. While Bitcoin’s role as a reserve asset remains limited, its appeal as a decentralized and government-independent asset continues to grow.

The evolution of neutral reserve assets is being shaped by both public and private actors, with the U.S. itself playing a dual role. On one hand, it is reinforcing the dominance of the dollar through digital finance initiatives, while on the other, it is facilitating the development of alternative reserve systems. This duality underscores the complexity of the global financial transition and highlights the growing importance of assets that offer neutrality, whether in physical, digital, or hybrid forms.