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Stablecoin issuers absorb part of China’s retreat from Treasuries
Federal Reserve Bank of San Francisco researchers said Tether and Circle boosted their Treasury and repo holdings by about $200 billion in five years, taking up more than 40% of the decline in China’s holdings over the same period.
Stablecoin issuers are increasingly buying US Treasuries as foreign official demand weakens, according to research from the Federal Reserve Bank of San Francisco cited by CryptoSlate.
The Fed said Tether and Circle increased their Treasury securities and repurchase agreement holdings by about $200 billion over the past five years, a scale equivalent to more than 40% of the decline in China’s Treasury holdings during the same period.
The report also found stablecoin-linked Treasury holdings have risen more than tenfold over five years as demand for dollar-linked digital tokens expanded, while China’s pullback from US debt began more than a decade ago.
As a result, the San Francisco Fed said the changing mix of US creditors could influence the investor base for the Treasury market, noting foreign investors fell from holding more than half of outstanding Treasuries around 2008 to roughly 30% by early 2026.