China is leading a growing shift among central banks away from U.S. Treasurys and toward alternative assets like gold and even Bitcoin, according to Jay Jacobs, head of thematics and active ETFs at BlackRock who told CNBC.
Jacobs explained that rising geopolitical tensions and the growing divide between global economic blocs are pushing countries like China to question whether U.S. debt is still the safest option for their reserves. Instead, he said, a mix of hard assets and decentralized stores of value is starting to look like a smarter long-term strategy.
Jacobs also pointed to the freezing of $300 billion in Russian central bank assets following the country’s invasion of Ukraine. That move, Jacobs believes, was a wake-up call for other governments, especially China, to rethink how vulnerable their reserves might be.
In the interview, Jacobs also hinted that BlackRock sees growing political fragmentation as one of the biggest forces shaping global markets in the years ahead.