New York, October 19th / PRNewswire / -- According to news reports on American News Group, based on data released by the U.S. Treasury Department on Friday, as of the end of August, China held $590.7 billion in U.S. Treasury bonds, which is lower than the $699.7 billion held a year ago. Fortune states that this is the lowest level in 18 years; for those who are concerned about "de-dollarization," this trend seems clear. However, during the same period, holdings attributed to Belgium and Canada continued to rise. A former Treasury Department official who tracks these data suggested that some of China's bonds might simply be held in custodial accounts belonging to others.
The companies and funds mentioned in this article include: Bank of New York Mellon ( NYSE : BNY ), Dow Jones & Company ( NYSE : STT ), iShares 20+ Year Treasury Bond ETF ( NASDAQ : TLT ), CME Group ( NASDAQ : CME ), SPDR Gold Shares ( NYSE Arca : GLD ).
Track custodian institutions
The problem lies in the method of data collection. The U.S. Treasury Department primarily collects data from domestic custodian institutions and brokerage traders in the United States, while U.S. securities held by overseas custodial accounts may not be attributed to their actual owners. This creates an opportunity for a country's holdings to appear in the name of a financial center.
In August, Belgium was recorded as holding $490.5 billion in U.S. Treasury bonds, up from $451.1 billion a year earlier. Canada held $464.6 billion, an increase from $444 billion; Fortune notes that Canada's total was only $169 billion five years ago. Brad Setzer, a former Treasury Department official and member of the Council on Foreign Relations, Brad Setser, told Fortune: "It is now very likely that China is using multiple non-U.S. custodian institutions to hide its actual holdings." He added on X, "The evidence that China uses Canadian custodian institutions to hold part of its bonds is particularly strong," referring to bonds issued by the U.S. Federal Housing Administration.
Treasure Keeper
This has drawn attention to the global custody business. Large banks provide custody and services for central banks, pension funds, and asset management companies, managing trillions of dollars in securities. Bank of New York Mellon reported that as of September 30, it had custodyed and/or managed assets amounting to $63.4 trillion, a 10% increase from a year earlier; its revenue in the third quarter grew by 12% to $5.7 billion, and earnings per share after dilution increased by 24% to $2.34. Robin Vince ( Robin Vince ), the CEO, stated in a statement on October 15: "Bank of New York Mellon delivered strong results in the third quarter." According to Stock Analysis data, the stock rose 0.41% last week, from $142.71 at the close on October 9 to $143.30 on October 16.
Tofu Company reported that as of the end of the third quarter, it managed and/or held assets amounting to $59.2 trillion, a 14.5% increase from a year ago; managed assets grew by 15.8% to $6.3 trillion. Revenue increased by 12.9% to $4 billion, and earnings per share after dilution rose by 32.7% to $3.69. Nevertheless, on October 14, the day of the earnings announcement, the stock fell by 4.14% and closed at $165.72 that week, representing a weekly decline of 5.28%.
More bills than bonds
Fortune also reported that China reduced its holdings of long-term U.S. debt while increasing its holdings of short-term treasury bills. For all foreign holders, the data for August was mixed: the total amount of U.S. Treasury bonds held by foreigners rose from $9.25 trillion a year ago to $9.33 trillion; at the same time, foreign investors netted a purchase of $300.7 billion in long-term U.S. securities that month, but reduced their holdings of treasury bills by $47.8 billion. Japan remains the largest holder, with $1.07 trillion, followed by the United Kingdom with $1.01 trillion.
Last week, long-term bonds rose. iShares, which holds assets of approximately $47 billion, and its 20+ Year Treasury Bond ETF increased from $77.98 to $80.05, representing a gain of 2.65%.
Trading activities surrounding government debt have always been active. CME announced that in the third quarter, the average daily trading volume reached a record of 29.4 million contracts, an increase of 16% from a year ago, with interest rate contract trading volumes also setting new records. US Treasury bond futures and options had an average daily trading volume of 9.4 million contracts during that quarter, a growth of 25%; in September, the average daily trading volume was 9.5 million contracts, an increase of 42%. CME's stock price rose 4.74% last week to $293.87.
(To be continued...) For more market reports, see americannewsgroup.com.
Gold hedging
Part of the story is asset diversification. Fortune reports that after the United States invaded Ukraine in 2022, it imposed sanctions on Russia, which prompted the People's Bank of China and other central banks to reduce their dollar reserves and turn to alternative assets such as gold. In September, the People's Bank of China increased its gold holdings for the 23rd consecutive month, and it was the largest single-month purchase since September 2023.
For those who want to invest in gold but do not wish to hold the physical asset, the SPDR Gold Shares fund manages assets of approximately $141 billion, with a fee rate of 0.40%. The fund fell by 0.67% last week, dropping from $384.58 to $382.01, after having risen by 1.79% on October 15th.
Meanwhile, China's trade surplus continues to expand. According to reports cited by CNN, the General Administration of Customs of China announced that the trade surplus for the first nine months of 2026 reached $938.1 billion, with September alone accounting for $133.5 billion, as exports increased by 36.3% year-on-year. Fortune noted that this figure follows a surplus of $1.2 trillion in 2025, which was the largest on record. Szeitzer estimates that U.S. financial assets still account for 50% to 55% of China's reserve portfolio.
Charts of bonds, gold, and banks are telling this story in real time. You can obtain free Stock Preachers guides as well as The Roadmap market reports at stockpreachers.com to learn how to interpret these charts.
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This article is an independent news commentary. American News Group is wholly owned and operated by Market Equities Limited (“MEL”), which is a company registered under Irish law. MEL has not received any compensation from any of the fund sponsors or companies mentioned in this article. MEL and its owners, operators, directors, and related parties currently do not hold any shares in the funds or companies mentioned in this article, but reserve the right to buy and sell such shares at any time without prior notice. The weekly price changes are based on data from Stock Analysis from the close on October 9, 2026, to the close on October 16, 2026, and do not include distributed earnings. The information is sourced from company and fund sponsor announcements, data from the U.S. Treasury Department, public reports, and third-party data considered reliable, but no guarantee is provided for its accuracy. Investing in securities carries risks, including the potential loss of part or all of the investment. This article is governed by Irish law.
