A piece from KWN ( a bit sensationalistic at times), but does bring up potential scenarios:
Here is the real pressure point: Japan is one of the largest foreign holders of Treasuries. If Tokyo ever starts selling in size, yields spike, liquidity tightens, and the shock hits banks, pensions, and risk assets worldwide. That is why Washington is leaning on the Bank of Japan to stay put.
Meanwhile, China is hedging.
Beijing has been stacking gold for years. The yuan has been firmer against the dollar at times. Hong Kong and Shanghai have built gold-settlement plumbing that can clear without going through the dollar.
Yuan-denominated gold trading infrastructure is live. That is a parallel system, not a replacement for the dollar.
The CCP can never replace the dollar, but they’re taking advantage of the situation in real time.
Why it matters: If confidence in Treasuries cracks, paper assets do not drift lower politely. Gold can reprice violently. China wants an escape hatch if that day comes.