China currently only holds about 2% of U.S. debt. What is the risk exactly?

Which will cause great unrest in the US and further allow authoritarian takeover. Fun times.

Stablecoins offer a relentless price insensitive buyer of US debt. This is good for America, good for democracy, and good for property rights globally.

However, stablecoins WILL cause unrest in Nigeria, Venezuela, Lebanon, and Turkey as their corrupt local currency completely erodes and the ruling class can no longer extract from their citizens.

That sounds like a perpetual motion machine that the US can get addicted to and then come apart once stable coins suddenly become price sensitive.

Or, an alternative, and hear me out, maybe this could also be called "an economy"

Confidence in crypto will go poof when there's a big enough run that the measly 7 transactions per second can't keep up with demand. We just haven't seen a crypto bank run yet. The $100 / transaction is nothing compared to what it could be. When that happens "stable" coins will lose their stability and the smoke and mirrors behind audit-free coins will collapse. You couldn't pay me to hold crypto.

Japan holds more US debt than China. The UK has also surpassed China.

China had $776.5B a year ago and has $730.7B now, a roughly 5% drop. They don't seem to "rapidly winding down", unless there's some additional data I'm missing.

Look at the other holders. Belgium and Luxembourg combined have more US debt than China.

If the goal was to crash the US economy by selling their small amount of debt (which likely isn't possible for them to do, despite the rhetoric, they have less than 2% of the total debt), they would also significantly impact of all the countries listed here, which would make them very unpopular indeed:

https://ticdata.treasury.gov/resource-center/data-chart-cent...