US Treasury demand is being artificially sustained through regulatory requirements on dollar stablecoins rather than organic foreign central bank demand.

"SOMA Manager Roberto Perli called reserves ample and warned that heavy net bill issuance in July and August 2026 could tighten money markets."

"The GENIUS Act, law since July 2025, requires every dollar stablecoin — a private digital token pegged to the dollar — to be fully backed by actual dollars or Treasuries. Which means every new digital dollar in a market near $316 billion, according to industry trackers, forces its issuer to buy American debt. Even as foreign central banks retreat — US Treasury data put China's holdings at about $652 billion, the lowest since 2008 — a replacement buyer has been created by law."