Foreign investors sold $29 billion of short-term U.S. Treasuries in June. However, they did not flee the United States: 181.4 billion went to American stocks in the same month. For Washington, travel matters. Stablecoins could provide steady new demand for T-bills as some foreign investors reduce their positions.
In brief
- Foreign investors sold $29 billion worth of T-bills in June.
- Tether alone holds nearly $115 billion in live Treasuries.
- The growth of stablecoins could transform their issuers into major buyers of US debt.
Stablecoins come at the right time for Washington
The movement had already started in May. Foreign investors had sold $43.5 billion of short-term Treasury bills. June adds 29 billion. Two months: about $72.5 billion down. We were already wondering about the role that stablecoins could play in financing the American debt.
The June figures, however, deserve a nuance. Foreign capital continues to flow into the United States. The net flow reached $133.5 billion for the month.
Money simply prefers something else. Foreigners bought $181.4 billion in U.S. stocks and just $6.8 billion in long-term Treasury debt. For T-bills, they sold. Foreign assets in these short securities thus increased from around 1,430 billion dollars in May to 1,400 billion in June. Washington retains buyers. The composition changes.
Tether already owns $115 billion in T-bills
The functioning of a stablecoin explains the interest of the American Treasury. A user gives a dollar to an issuer and receives an equivalent token. The company must then maintain assets that are liquid enough to reimburse customers who want their dollars back.
Short-term Treasury bills fulfill this function perfectly. Tether already gives a sense of scale. At the end of the second quarter, the USDT issuer reported $114.96 billion in directly held T-bills. He also had 25.62 billion in short-term repo operations.
The reserves have grown to a considerable size. Tether had already significantly increased its holdings of American public debt in 2025. The 29 billion sold by foreign investors in June represent around a quarter of Tether’s direct portfolio of T-bills.
Circle follows a similar logic with USDC. A large portion of its reserves go through the Circle Reserve Fund managed by BlackRock. This notably keeps cash, short-term Treasury securities and repos guaranteed by these same bonds. A dollar that enters a stablecoin can therefore end up in American debt without its user purchasing a Treasury bond themselves. It’s quite convenient for Washington.
Stablecoins do not yet replace foreign investors
You shouldn’t go too fast. There is no evidence that Tether, Circle or any other issuer directly absorbed the $29 billion sold in June. The supply of stablecoins has hardly increased over the period.
Tether had 184.6 billion USDT in circulation at the end of the second quarter, only 446 million more than the previous quarter. The entire stablecoin market was hovering around $302 billion on August 21.
Not enough to explain 29 billion new purchases. Washington’s bet is more about what comes next. The GENIUS Act requires regulated stablecoins to maintain liquid reserves. Cash, short T-bills and repos linked to the Treasury occupy a privileged place in the system.
The US Treasury has just published new rules preparing the application of this law on stablecoins. The more digital dollars circulate, the more their issuers must set aside reserves. And part of these reserves ends up in the American debt. Foreign investors sold 29 billion T-bills in June. Stablecoins have not yet plugged the hole. Washington is already preparing a place for them to do it tomorrow.
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