Deep Dive: Is the World Really Dumping U.S. Debt?

Who Holds It, Who’s Selling, and When It Becomes Alarming

Claims that “the world is abandoning U.S. Treasuries” have become common — especially as China, India, and Brazil reduce exposure and BRICS advances alternative payment systems. But the data tells a more nuanced story.

This deep dive separates measurable shifts from headline exaggeration, and explains what is still manageable — and what would signal real stress.

1. Who Holds U.S. Treasury Debt Today?

Foreign countries hold approximately $9.36 trillion in U.S. Treasury securities, according to the U.S. Treasury.

Top Foreign Holders

Rank	Country / Jurisdiction	Holdings (USD)
1	Japan	~$1.20T
2	United Kingdom	~$0.89T
3	China (Mainland)	~$0.68T
4	Belgium	~$0.48T
5	Canada	~$0.47T
6	Cayman Islands	~$0.43T
7	Luxembourg	~$0.43T
8	France	~$0.38T
9	Ireland	~$0.34T
10	Taiwan	~$0.31T

Important nuance: Custody location does not always reflect the ultimate owner. Financial hubs frequently hold securities on behalf of foreign central banks and institutional investors.

2. Who Has Been Selling — and How Much?

Several countries have reduced Treasury exposure over the past year.

Countries Reducing Treasury Holdings (Year-over-Year)

Country	Prior Level	Latest Level	Change
China	~$769B	~$683B	↓ ~$86B
India	~$234B	~$187B	↓ ~$47B
Brazil	~$229B	~$168B	↓ ~$61B
Poland	~$45–50B	Slightly lower	Modest

China, India, and Brazil — key members of BRICS — are clearly diversifying.

However: Total foreign holdings of Treasuries rose overall, indicating that reductions by some countries were offset by increased purchases elsewhere, particularly in Europe.

This is portfolio rotation, not a global exit.

3. The Gold Question

Several countries have increased gold reserves while trimming Treasury exposure.

This reflects:

• Sanctions-risk hedging

• Reserve diversification

• Reduced reliance on U.S.-controlled financial infrastructure

Gold, however, does not replace Treasuries’ role as:

• Primary global collateral

• Deep, liquid reserve asset

• Anchor of global funding markets

Gold hedges risk — it does not run the system.

4. BRICS, Currencies, and the Dollar

Despite frequent headlines, BRICS is not close to launching a unified reserve currency.

What is happening:

• Expansion of local-currency trade settlement

• Development of alternative payment rails

• Exploration of interoperable CBDCs

This reduces USD dependence in trade flows, but does not replace the dollar’s reserve-currency role.

Reserve Currency vs Payment System

Feature	U.S. Dollar	BRICS Payment Systems
Liquidity	Very high	Limited
Safe collateral	Treasuries	Fragmented
Legal trust	Strong	Uneven
Trade settlement	Dominant	Growing

The dollar’s strength is structural — not ideological.

5. What Is Still Manageable — and What Would Be Alarming?

Still Manageable

• Selective selling by individual countries

• Gold accumulation as a hedge

• Gradual diversification of reserves

• Stable Treasury auction demand

Becomes Alarming If:

• Foreign official Treasury custody falls sharply and persistently

• Multiple Treasury auctions show weak demand

• Long-term borrowing costs rise due to risk repricing

• Several major holders sell simultaneously

• Dollar volatility forces emergency policy responses

At present, these conditions are not met.

The ONEST Takeaway

The global financial system is adapting, not unraveling.

Countries are hedging risk, diversifying reserves, and building alternative payment channels — while still relying heavily on U.S. Treasuries for liquidity and stability.

The dollar’s dominance may erode at the margins, but collapse narratives remain unsupported by data.

Understanding the difference between noise and coordination is what matters now.