As the United States and China wage a quiet war over the future architecture of global monetary power, Morocco has made a deliberate choice: doubling down on US Treasury bonds and the liquidity that the dollar system provides, even as gold increasingly emerges elsewhere as a geopolitical hedge.
China’s pivot away from dollar-denominated assets has been gradual but unmistakable. Over the past decade, Beijing has cut its holdings of US Treasury securities nearly in half — from over $1.25 trillion to approximately $683 billion by end-2025 — while official gold reserves held by the People’s Bank of China surpassed 2,306 tonnes, a record high. The strategy is widely read as an attempt to reduce exposure to potential financial sanctions and to bolster the yuan’s credibility in a reordering global financial system.
The backdrop driving this shift is well-documented. US M2 money supply now approaches $22.4 trillion, the federal deficit hovers near $1.8 trillion, and national debt exceeds 124 percent of GDP — conditions that fuel concerns about the long-term erosion of the dollar’s purchasing power, a phenomenon some economists call the “Great Debasement.”
Morocco’s response stands in contrast to Beijing’s direction. Bank Al-Maghrib increased its holdings of US Treasuries to $4.1 billion by end-2025, up $891 million — or 28 percent — year-on-year. Gold, meanwhile, remains a secondary position, at roughly 22.1 tonnes, representing about 5.4 percent of total reserves.
For a country whose dirham is pegged to a euro-dollar basket, the calculus is pragmatic. A weaker dollar reduces the dirham-denominated cost of dollar-priced imports, particularly energy, offering short-term macroeconomic relief. Treasuries, meanwhile, provide unmatched liquidity and serve as high-quality collateral in international financing operations — qualities that Morocco clearly values.
The broader landscape is shifting, nonetheless. Under Basel III rules, physically held gold now carries a zero risk weight, allowing it to count at full value in bank balance sheets. Central bank gold holdings are rising globally, reaching around 25 percent of reserves in advanced economies. China is also building what analysts describe as a “gold corridor” through the Shanghai Gold Exchange, extending its infrastructure for physical gold settlement beyond the mainland via Hong Kong.
Washington’s counter-strategy runs on a different track — financial innovation and digital assets. The July 2025 passage of the Anti-CBDC Surveillance State Act restricts the Federal Reserve from issuing a central bank digital currency without Congressional approval, while the Genius Act provides more flexibility for privately issued dollar-backed stablecoins, sustaining demand for digital dollars and, by extension, Treasury securities.
In this contest over the very definition of money, Morocco has aligned itself firmly with its historical financial partner.