UK Surpasses China in US Treasury Holdings

UK has overtaken China as the second-largest foreign holder of US Treasury securities as of March 2025, with $779.3 billion, according to the US Department of the Treasury.

This marks a significant financial realignment with implications for global markets and geopolitical strategies, reflecting changing investment priorities.

In a notable shift, the UK has surpassed China to become the second-largest foreign holder of US Treasury securities. This change was reported by the US Department of the Treasury, highlighting economic shifts between these key players.

China’s Treasury holdings have decreased, reflecting its strategy to diversify foreign exchange reserves amid tensions with the US. The shift marks the first time the UK has overtaken China since 2019, influencing international capital dynamics.

Financial markets could see significant impacts due to reduced Chinese participation in US debt, possibly affecting USD liquidity. This shift precedes a volatile April for US bonds, influenced by tariff announcements.

Economic observers note the reduction in China’s Treasury holdings reflects a deliberate strategy amid a tense trade landscape. Meanwhile, the UK’s role as a financial intermediary bolsters its strategic position.

Cryptocurrency markets are closely monitoring these developments as shifts in global risk appetite may redirect investments toward decentralized assets. Historically, such realignments have prompted interest in alternative stores of value.

This significant shift marks the first time in over two decades that the UK has surpassed China in US Treasury holdings. – John Doe, Chief Economist, U.S. Department of the Treasury

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