China Rapidly Dumps $8.2 Billion in U.S. Treasury Bonds Amidst Ongoing Dollar Downturn

Daily Hodl – June 28, 2025

China Sheds $8 Billion in U.S. Treasury Securities, Boosts Gold Reserves to Record Levels

China's central bank has offloaded over $8 billion worth of U.S. Treasuries in April 2025, shrinking its Treasury holdings to levels last seen in 2009 [1]. The People's Bank of China now hoards less Treasury paper than the United Kingdom, dipping to third place on the list of principal foreign holders of U.S. bonds after nearly two decades in second place.

Macro analyst Adam Kobeissi highlights that this move to jettison U.S. Treasuries coincides with an extraordinarily aggressive amassing of gold by China since 2022. By Q2 2025, gold accounted for nearly seven percent of China's total foreign exchange reserves, flipping the script on the U.S. dollar's dominance [1][4].

"China is ditching the U.S. Dollar:

In the last five years, the share of US Treasury Holdings in total Chinese FX reserves has dropped by about 15 percentage points, now hovering around 22%, nearing the lowest in at least 15 years.

At the same time, gold’s share has surged by roughly 5 percentage points, hitting a record 6.8%.

This trend gained momentum in 2022, and over the last year, gold’s stake in Chinese reserves has doubled.

In the last twelve months, China has boosted its gold holdings by approximately 200 tonnes."

The U.S. dollar index (DXY), which measures the currency's strength compared to a basket of foreign currencies, has slid over 15% since 2022, raising doubts about the greenback's survival as a globe-dominating reserve asset [5]. Last week, financial analyst Nassim Taleb argued that the dollar has already been ousted by gold as the world's primary reserve currency [6].

Taleb opines,

"The pounding of gold in the reserves and its behavior in the last twelve months suggests it has replaced the dollar as the reserve currency.

Observe the accumulation of gold in the reserves, and watch gold's price action since 2022.

It didn't begin with Trump's policies. It started under Biden when he froze accounts connected to Putin, and suppose you thought it would be limited to those people, but individuals not connected to Putin decided to stay clear of the euro and the dollar.

And gold effectively functions as the reserve currency now. Transactions are primarily dollars and euros, with gold replacing the safekeeping of wealth behind the scenes."

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China Rapidly Dumps $8.2 Billion in U.S. Treasury Bonds Amidst Ongoing Dollar Downturn