# Foreign central banks are dumping US Treasuries

> Treasury holdings by foreign governments have collapsed to 1993 lows, while opaque financial centers and US hedge funds domiciled abroad now hold the bulk of foreign Treasury positions.
- Title: Foreign central banks are dumping US Treasuries · Wolfstreet
- Summary: Treasury holdings by foreign governments have collapsed to 1993 lows, while opaque financial centers and US hedge funds domiciled abroad now hold the bulk of…
- Keywords: us treasuries, foreign central banks, treasury holdings, federal debt, japan, china, hong kong, cayman islands, hedge funds, treasury market, currency intervention, financial centers
- Source: Wolfstreet — https://wolfstreet.com/2026/09/17/treasuries-have-become-badly-unappetizing-for-foreign-central-banks-governments
- Published: 2026-09-17T00:00:00+00:00
- Read time: 2 min
- Topics: us treasuries, foreign central banks, treasury holdings, federal debt, japan, china, hong kong, cayman islands, hedge funds, treasury market, currency intervention, financial centers
## Foreign governments abandon Treasuries
Foreign central banks and governments cut Treasury holdings to $3.77 trillion in July, matching 2012 levels despite the total Treasury supply nearly tripling since then.
## Official share collapses to record low
Foreign official holdings dropped from 38% of all Treasuries in 2007-2009 to just 12.8% in July, the lowest share since 1993, even as total Treasury debt exploded.
## Three major shifts in Treasury demand
Treasuries are now unappealing to foreign governments, the US depends less on foreign financing, and opaque offshore centers now dominate foreign Treasury holdings.
## Offshore centers now control Treasuries
Seven opaque financial centers hold $3.28 trillion in Treasuries, representing 35% of all foreign holdings and 11% of all outstanding Treasuries, up from minimal shares a decade ago.
## Cayman Islands hide US hedge funds
The Cayman Islands hold $460 billion in Treasuries, mostly from US hedge funds domiciled there that engage in the leveraged Treasury basis trade, estimated at close to $2 trillion.
## US companies hide profits offshore
US companies like Apple and Big Pharma hold Treasuries through Irish and other foreign entities to avoid repatriating profits and paying US income taxes, inflating foreign holdings.

> Apple became a poster boy of that during a Senate investigation in 2013.
## Japan dumps Treasuries for yen support
Japan sold $135 billion in Treasuries from February through July to obtain dollars for currency interventions supporting the collapsing yen, locking in huge profits.
## China and Hong Kong keep dumping
China and Hong Kong combined have shed $587 billion in Treasuries since 2015, cutting their share to just 3% of outstanding Treasuries, down from much higher levels.
## Norway's oil fund may cut more
Norway's Government Pension Fund Global, the world's largest sovereign wealth fund with $2.3 trillion in assets, has proposed cutting Treasury holdings by about $80 billion.
## Offshore holdings now dominate market
Foreign private holdings, including US hedge funds and companies in offshore centers, now represent 32% of all outstanding Treasuries, near record lows despite massive debt issuance.
## Key takeaway

Foreign official holders have lost interest in US Treasuries as their share plummeted from 38% to 13%, but American financial entities hiding in offshore centers have filled the gap, creating new risks in the Treasury market.