Stablecoins Fill Void Left by China in US Treasury Market

Stablecoin issuers have become a significant force in the US Treasury market, replacing nearly 40% of China's lost demand for US government debt. Over the past five years, Tether and Circle have increased their Treasury securities and repurchase-agreement holdings by about $200 billion.

This shift has altered the investor base underpinning the world's largest government bond market. Stablecoin issuers' Treasury holdings have risen more than tenfold in five years as demand for dollar-linked digital tokens expanded, while China has continued to retreat from US debt that began more than a decade ago.

The rise of crypto-linked buyers comes as the composition of US creditors undergoes a longer-term change. Foreign investors held more than half of outstanding Treasury securities around 2008, but their share had dropped to roughly 30% by early 2026.