The Cayman Islands held US$463.0 billion of U.S. Treasury securities at the end of August, the sixth-largest holding attributed to any foreign jurisdiction, according to figures published by the U.S. Department of the Treasury on 16 October. The total was US$2.9 billion higher than in July, but the islands lost the fifth place they had held a month earlier after Canada's attributed holdings rose by US$38.3 billion to US$464.6 billion, leaving Cayman US$1.6 billion short of the top five.

The monthly Treasury International Capital (TIC) release is the U.S. government's principal measure of who holds its debt abroad, and Cayman's place in it has become a recurring talking point in Washington because of the islands' hedge fund sector. Over the 12 months to August, holdings attributed to the Cayman Islands rose by US$52.5 billion, or 12.8%, from US$410.5 billion in August 2025.

Where Cayman sits in the table

Japan remained the largest foreign holder at US$1,068.3 billion, although its attributed holdings fell by US$35.6 billion in the month. The United Kingdom was second at US$1,009.5 billion, the first time the TIC series has recorded a UK figure above US$1 trillion, followed by mainland China at US$590.7 billion, its lowest level since August 2008 after a US$27.3 billion decline. Belgium was fourth at US$490.5 billion and Canada fifth. Luxembourg, with which Cayman has traded places repeatedly over the past year, was seventh at US$448.2 billion, followed by France, Ireland and Taiwan. Bermuda was 20th at US$111.8 billion.

Cayman's attributed holdings have climbed almost without interruption since the autumn of 2025. They stood at US$421.6 billion in December, crossed US$460 billion in March and peaked at US$471.6 billion in April before easing to US$453.1 billion in June. In July the islands overtook Luxembourg to re-enter the top five, a position they held for a single month.

The positions between fourth and seventh place are tightly bunched. Belgium, Canada, Cayman and Luxembourg were separated by US$42.3 billion in August, less than Canada's single-month swing; Canada's attributed holdings have moved by more than US$30 billion in nine of the past 12 months, while Cayman's largest monthly move in that period was US$18.2 billion. Cayman accounted for 5.0% of all foreign-held Treasuries at the end of August.

Total foreign holdings of Treasuries rose by US$83.3 billion to US$9,331.7 billion in August, reversing two months of decline, of which US$3,755.6 billion was attributed to foreign official institutions. The Treasury said the month produced a net TIC inflow of US$199.8 billion, of which US$178.5 billion came from private investors and US$21.3 billion from official institutions. After adjustments, it estimated overall net foreign purchases of U.S. long-term securities at US$279.2 billion in August, while foreign residents reduced their holdings of short-dated Treasury bills by US$47.8 billion.

What the figures do and do not show

The Treasury attaches a standing caveat to its country table. The data, it says, are collected primarily from U.S.-based custodians and broker-dealers, so securities held in custody accounts outside the United States may not be attributed to their actual owners, and the figures may not precisely show each country's ownership. A fund domiciled in Grand Cayman whose Treasuries sit with a custodian in London or Brussels can appear in the UK or Belgian line. Equally, the Cayman line captures holdings booked through the islands by investors who live elsewhere.

That caveat matters more for Cayman than for almost any other entry in the table, because the islands are the dominant offshore domicile for hedge funds. Cayman Islands Monetary Authority figures published on its website put the number of regulated funds at 31,547 at 30 September 2026, comprising 18,360 private funds and 13,187 mutual funds, up from 31,145 at the end of June. Samantha Widmer, director and head of funds and capital markets at Cayman Finance, said in July that the islands had "added 547 new funds in the first half of the year, comfortably ahead of the 448 recorded in the whole of 2025", and that it was "encouraging that emerging managers keep choosing Cayman for their hedge funds".

The Treasury's own annual survey of foreign portfolio holdings, published in April 2026 with data as at 30 June 2025, shows how far the islands' footprint extends beyond government bonds. It attributed US$3.18 trillion of U.S. securities of all kinds to the Cayman Islands, the second-largest total of any foreign jurisdiction after the United Kingdom's US$3.46 trillion and ahead of Canada and Japan. Within that, Cayman held US$2.16 trillion of U.S. equities, more than any other country, together with US$519 billion of long-term corporate debt and US$286 billion of long-term Treasuries. The survey report notes that investment funds in financial centres such as Cayman "can hold securities on behalf of investors that may be from other countries", and refers readers to Federal Reserve research on Treasuries held by Cayman-domiciled funds.

That research is at the centre of a debate among U.S. regulators about how much of the Treasury market is held through the islands. In a note published by the Board of Governors of the Federal Reserve System on 15 October 2025, six economists compared the TIC country figures with confidential Form PF filings, which hedge fund managers make to the U.S. Securities and Exchange Commission. They found that Cayman-domiciled hedge funds' Treasury holdings, as reported on Form PF, had risen by about US$1 trillion since 2022 to reach US$1.85 trillion by the end of 2024, while the TIC data showed no comparable increase.

The TIC figures, the authors wrote, "appear to severely undercount Cayman-domiciled hedge funds' holdings of U.S. Treasuries by around US$1.4 trillion" at the end of 2024. Between January 2022 and December 2024, a period in which the Federal Reserve was shrinking its own balance sheet, the funds bought a net US$1.2 trillion of Treasuries. If all of that was in notes and bonds, the economists calculated, Cayman hedge funds absorbed 37% of net issuance of those securities, nearly as much as all other foreign investors combined. On that reading, the Cayman Islands would be the largest foreign holder of U.S. government debt, ahead of Japan, the United Kingdom and China, rather than the sixth.

The authors attributed much of the activity to the Treasury cash-futures basis trade, in which leveraged funds buy Treasury securities and sell matching futures contracts to capture small pricing differences, financing the position in the repurchase market. The discrepancy between the two data sets, they said, "is under active investigation", adding: "In the meantime, data users should be aware that this major gap exists." The Federal Reserve notes that staff papers of this kind represent the views of their authors and not the official position of the Board.

Why it matters in George Town

For Cayman, the TIC table cuts two ways. The headline ranking is regularly cited by the islands' financial services industry as evidence of the jurisdiction's weight in global capital markets, and by critics in the United States as evidence that a British Overseas Territory whose population the Economics and Statistics Office put at 90,577 in December 2025 has become a conduit for the financing of the U.S. federal deficit. Neither account is complete. The money attributed to Cayman belongs overwhelmingly to investors in funds administered from the islands, not to Cayman residents or the Cayman Islands Government, and the Treasury's own caveat means the published figure is as likely to understate the true position as to overstate it.

The ranking also carries a practical consequence. The Federal Reserve's economists said the gap between the two data sets was under investigation, and any move by U.S. authorities to require more granular reporting of offshore fund holdings would fall first on managers of Cayman vehicles and their administrators.

The next TIC release, covering holdings at the end of September, is scheduled for 18 November and will show whether Cayman's single month in the top five was a blip or the start of a longer stay outside it.