As foreign investors dump $29 billion in Treasury bills, Washington pivots to stablecoin issuers to back US debt

Foreign investors sent a net $133.5 billion into US financial markets in June. During the same month, they sold $29 billion of Treasury bills.

Those numbers describe two different tides in the same month. Most of the incoming money went into US stocks, while demand for government debt was much weaker. Foreign buyers purchased $181.4 billion of US equities and only $6.8 billion of long-term Treasuries. At the short end, they reduced the bills commonly used as a place to park cash.

That split helps explain why stablecoins have become part of Washington's debt strategy. Issuers such as Tether and Circle keep much of the money backing their tokens in Treasury bills and closely related assets. If foreign buyers keep reducing their bill holdings, a larger stablecoin market could provide another, and potentially an equally large source of demand. June's data show that the sector already has plenty of scale, while recent token issuance was far too small to explain the $29 billion sale.

Foreign investors wanted stocks more than cash-like debt

The Treasury International Capital report, usually called TIC, is a monthly record of money moving between the United States and the rest of the world. It combines purchases of securities with shorter-term banking flows, so the headline total can hide very different decisions underneath it.