Central banks, particularly China, may start to shift away from US Treasurys

By Jay Jacobs, BlackRock's head of thematics and active ETFs. Updated Apr 20, 2023 at 1:13 a.m. PDT

According to Jay Jacobs, the head of thematics and active ETFs at BlackRock, central banks may start to shift away from US Treasurys and explore alternatives such as gold and Bitcoin.

In a recent interview with CNBC, Jacobs said that geopolitical tensions and rising global uncertainty are accelerating diversification strategies among central banks.

He pointed to a long-term trend where countries have been reducing their reliance on dollar-based reserves in favor of assets like gold and, increasingly, Bitcoin (BTC).

“This whole diversification away from traditional assets and into things like gold and also crypto [...] probably began three, four years ago,” explained Jacobs.

He said that recent geopolitical fragmentation has intensified the push toward alternative stores of value.

Jacobs referenced growing concerns about the freezing of $300 billion in Russian central bank assets following its invasion of Ukraine, suggesting that such events have prompted countries like China to rethink their reserve strategies.