BEIJING – In a move shaking international bond markets, Chinese regulators have reportedly instructed the nation’s largest commercial banks to scale back their holdings of U.S. Treasury securities. The verbal directive, issued on February 9, 2026, urges financial institutions to curb new purchases and pare down existing exposure, citing heightened "concentration risks" and extreme market volatility.
While the order does not apply to China’s official state-held reserves, it marks a significant escalation in Beijing's strategy to insulate its financial system from the U.S. dollar. China’s total Treasury holdings have already plummeted to approximately $682.6 billion—the lowest level since the 2008 financial crisis.
Market Ripples: Gold and Crypto on the Move
The pivot away from "paper assets" has funneled massive liquidity into tangible commodities and alternative finance.
Precious Metals: Gold prices have surged to record highs, recently touching $5,600 per ounce, driven by the People's Bank of China’s 15-month buying streak.
Silver: Now classified by Beijing as a "strategic material," silver has seen a supply squeeze, with prices crossing $90 per ounce earlier this year.
Digital Assets: Privacy-centric and alternative crypto assets like $DUSK and $AXS are seeing increased speculative interest as traders hedge against fiat instability and potential currency warfare.
The Impact on Washington
The timing is particularly sensitive as President Trump prepares for a high-stakes visit to China this April. Analysts warn that cooling demand from one of America's largest creditors could force the U.S. to offer higher yields to attract new buyers, potentially driving up domestic interest rates and borrowing costs.
"Beijing is effectively building a defensive wall," says one market strategist. "By reducing systemic exposure to the dollar, they are preparing for a landscape where U.S. debt is no longer the undisputed safe haven."
