Stablecoin issuers now hold more US Treasuries than Japan

• Global debt rose $10 trillion in six months to $365 trillion, per the IIF’s September 23 Global Debt Monitor.
• Emerging market debt increased $6.5 trillion to $110 trillion, with China the single largest contributor.
• Stablecoin issuers have added roughly $200 billion in short-term Treasuries since 2023, a pace the San Francisco Fed says could nearly double to $400 billion by 2030.

• $365T global debt total, up $10 trillion in six months
• $200B stablecoin Treasury holdings added since 2023
• $400B projected 2030 issuer demand versus $270B market today

The Institute of International Finance, an industry group tracking sovereign and corporate borrowing worldwide, published the figure in its latest global debt monitor. Five days later, on September 28, San Francisco Fed economists released a separate paper identifying who is actually lending Washington the money; Cryptopolitan has previously reported the roughly $200 billion increase in stablecoin issuers’ Treasury holdings. The two reports describe the same debt pile from opposite ends: how fast it is growing, and who is absorbing it.

IIF Says Debt Growth Slowed to Less Than Half Last Year’s Pace

The IIF attributes the $10 trillion six-month increase to three drivers: emerging market borrowing, AI infrastructure spending, and military budgets.

Emerging market debt alone rose $6.5 trillion to $110 trillion, with China accounting for the largest single share. Even so, the increase came in below half the $21 trillion jump recorded over the same period a year earlier. The IIF attributes the slowdown to high interest rates, rising debt-servicing costs, elevated energy prices, and weaker investor sentiment tied to the Iran conflict.

Stablecoin Issuers Overtake Japan’s Treasury Buying Pace Since 2023

The San Francisco Fed paper tracks a structural shift in who holds US government debt as it has grown from roughly 35% of GDP in 2006 to 100% today. Foreign investors’ share of that debt has fallen from more than 50% at its late-2000s peak to about 30% by early 2026, with foreign governments pulling back hardest: their share dropped to 40% after decades in which they were the dominant buyers.

China’s Treasury purchases were cut roughly in half by mid-2026, the paper notes, a retreat that private buyers have partly filled.

Stablecoin issuers are the newest entrant in that private-buyer category. Since 2023 they have added short-term Treasuries faster than Japan, still the largest single foreign holder of US debt, building up roughly $200 billion in holdings over the period.

The mechanism is straightforward: issuers promise token holders a dollar-for-dollar redemption, so they park reserves in the most liquid, lowest-risk instrument available.

The San Francisco Fed compares the setup to a bank needing cash on hand to meet withdrawals, warning that doubts about convertibility could trigger a run.

GENIUS Act Locks In 1:1 Treasury Backing as Market Hits $270 Billion

The 2025 GENIUS Act formalized the reserve requirement that was previously market practice, mandating that payment stablecoins be backed one-for-one by eligible assets including Treasury bills. Brookings economists Nellie Liang and Brent Neiman analyzed the rule in an August paper, concluding it effectively ties stablecoin growth to Treasury demand by law rather than convention.

The total stablecoin market stood at about $270 billion as of June 2026, a base the Fed expects to keep expanding.

If the current trajectory holds, the San Francisco Fed projects issuer demand for short-term bills could reach roughly $400 billion by 2030, nearly double the $200 billion built up since 2023. That sum would remain small next to Washington’s overall borrowing needs but large enough, the authors argue, to move markets at the margin.

Bank for International Settlements research cited in the paper found stablecoin demand already strong enough to influence short-term bond yields, a view echoed in the IMF’s tokenization report describing stablecoins as a fast-growing form of securities-backed quasi-money.

The CCS read. Mandatory Treasury backing turns every stablecoin issuer into a de facto buyer of US short-term debt, which gives Washington a captive bid just as foreign governments retreat. That dependency cuts both ways: any GENIUS Act amendment to reserve rules, or a redemption run on a major issuer, now carries consequences for Treasury bill demand, not just token holders.

The San Francisco Fed’s $400 billion projection assumes current stablecoin adoption trends hold through 2030, a forecast that depends on continued GENIUS Act enforcement and no major issuer disruption; regulators and Treasury officials will be watching whether issuance keeps pace with the paper’s trajectory as the next quarterly reserve disclosures come due.