San Francisco · Circle · China · U.S. Treasury · Federal Reserve (FED) · Tether · CryptoSlate
Stablecoin issuers have replaced 40% of China’s dropped US Treasury demand
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Stablecoin issuers are emerging as a new source of demand for US government debt as foreign official holdings lose ground.
Key facts
- Foreign investors held more than half of outstanding Treasury securities around 2008, but their share had dropped to roughly 30% by early 2026, the San Francisco Fed said
- Extending the industry's recent growth rate would lift those holdings toward $400 billion by 2030, though the Fed researchers cautioned that the estimate carries substantial uncertainty
- Tether’s USDT and Circle’s USDC accounted for more than 80% of stablecoin market capitalization as of mid-August, the Fed researchers said
- The GENIUS Act, adopted in 2025, created a federal framework requiring approved US payment stablecoin issuers to fully back outstanding tokens with eligible liquid reserves
Summary
01 Stablecoin issuers added about $200 billion in Treasuries and repos over five years. 02 That equals more than 40% of the decline in China’s Treasury holdings over the same period. 03 The Fed estimates stablecoins issuer Treasury holdings could reach about $400 billion by 2030 if growth continues. Tether and Circle have increased their Treasury securities and repurchase-agreement holdings by about $200 billion over the past five years, equivalent to more than 40% of the decline in China’s Treasury holdings over the same period, researchers at the Federal Reserve Bank of San Francisco said.