Reserve managers are increasingly diversifying their foreign exchange reserves by reallocating from the US dollar to a mix of smaller G10 and select emerging-market currencies. This strategic shift aims to enhance diversification, yield, stability, and geopolitical neutrality. Notably, there is growing interest in the Canadian and Australian dollars, Swiss franc, and liquid emerging market currencies. While the US dollar remains the dominant reserve currency, the lack of a clear alternative is leading to a more fragmented reserve landscape. This trend could have long-term implications for the demand for US assets and bolster support for other major currencies.