Going for Gold: China’s Challenge to the US

Bitcoin is emerging as a new contender for reserve status, with Deutsche Bank and other analysts forecasting that it could join gold on central bank balance sheets within the next decade.

The gold market is booming, and the tectonic plates of global finance are shifting beneath our feet. China’s challenge to the US is about one gold bar at a time.

As policymakers in Beijing openly court foreign gold reserves, the ambitions are clear. Challenge the supremacy of the US dollar and shape a new era for international finance.

China’s Challenge to the US: Beijing’s Gold Strategy

Bloomberg reports that China’s challenge to the US has begun in a concerted campaign to entice other central banks to store their precious metal holdings in Shanghai.

This isn’t an abstract policy proposal or a trial balloon. The world’s largest physical gold exchange, the Shanghai Gold Exchange, has emerged as the centerpiece of China’s push to become the primary custodian for global bullion.

The reasons are as pragmatic as they are political. China’s officials argue that their deep physical gold market, advanced logistics, and financial infrastructure make Shanghai the “natural” haven for sovereign gold reserves.

Economic commentators see deeper motives beneath the surface. As Bitcoin maximalist and media personality, Max Keiser, remarked:

“As predicted, The obvious way for China, Russia, India, BRICS, Iran, can challenge US dollar hegemony is with a Gold-backed stable coin.”

With Western sanctions freezing Russian assets and gold reaching eye-watering highs, Beijing is betting that central banks (particularly those wary of dollar-based risk) will look east for alternatives. China’s challenge to the US and the established financial orders in London and Zurich.

Gold as the New Safe Haven

Central banks have long prized gold for its lack of counterparty risk and near-universal liquidity. But never before has a major economic power made such a calculated effort to upend where those gold reserves are held.

China’s challenge to the US arrives just as gold prices flirt with fresh records, driven by a mix of inflation anxiety, political turmoil, and synchronized global buying.

Bloomberg’s latest coverage highlights key details. China’s gold holdings increased for the eleventh straight month, and the Shanghai Gold Exchange reported record activity from foreign institutions.

While previous buying sprees were dismissed as routine diversification, the new wave of purchases signals something more.

China’s official reserves have climbed steadily, now exceeding 2,200 tons, and whispers abound that the true figure is far higher when off-book assets are considered.

But China isn’t just stockpiling. By encouraging other central banks to store gold reserves in Shanghai, Beijing is working to make the renminbi (RMB) and Chinese financial protocols indispensable to a global system that has, for decades, rotated around the US dollar.

What Could Change?

The potential consequences of China’s challenge to the US are vast and unpredictable. In the short term, it’s a confidence play: by housing foreign gold, China gains information, influence, and leverage with a global community of central bankers.

Should there be a future monetary crisis or sanctions event, those assets may find themselves balancing between Beijing’s priorities and Western restrictions.

Longer term, this “gold diplomacy” could help anchor broader acceptance of the RMB as a reserve asset (to Keiser’s point), buttress Beijing’s credibility in emerging markets, and force a slow, steady dedollarization across much of the world’s reserves.

But risks abound for those willing to make the leap. The opacity of China’s regulatory regime, potential capital controls, and questions about legal transparency mean some reserve managers may find Shanghai’s offer more convenient than prudent.

For now, as Bloomberg’s reporting cautions, only a trickle of foreign gold has reached China’s vaults; the world’s largest piles remain under Western watch.

Bitcoin: A New Reserve Rival or Passing Fad?

What about Bitcoin’s slow, sometimes volatile ascent as a competitor to traditional reserve assets? Whether you call it “digital gold” or simply a portfolio wild card, Bitcoin now shapes conversations in central banks and trading floors from São Paulo to Shanghai.

Deutsche Bank, in a 2025 research report, suggests that Bitcoin is on track to join gold as a recognized global reserve asset within the next decade. This would move Bitcoin from speculative outsider to a legitimate store of value alongside sovereign bonds and bullion.

Even as the People’s Bank of China pivots hard toward physical gold, authorities and state analysts are watching Bitcoin’s resilience and its growing institutional foothold.

Global funds and sovereign investors, especially in countries with weak banking systems or adversarial relationships with the West, increasingly view Bitcoin as digital insurance. Time will tell if China’s challenge to the US will include digital gold as well.