Stablecoins and US National Debt: The Connection
New US legislation mandates stablecoin issuers to purchase U.S. Treasury bonds, potentially aiding the country's debt financing challenges.
Investmentpunk Academy GmbH is shedding light on the often-overlooked connection between stablecoins and the U.S. national debt.
According to the company, U.S. Congress enacted legislation in 2025 requiring issuers of stablecoins, such as Tether (USDT) and Circle (USDC), to back their issued coins with U.S. Treasury bonds. This effectively transforms stablecoin companies into new, structural buyers of U.S. debt.
This mechanism, as explained by Gerald Hörhan, CEO of Investmentpunk Academy GmbH, serves as a political tool to finance the U.S. national debt. If global trade increasingly transacts using dollar-denominated stablecoins, it creates substantial new demand for U.S. Treasury bonds. This could alleviate a significant portion of the U.S.'s debt problem without resorting to printing more money.
The U.S. national debt exceeds $35 trillion, with a persistent budget deficit. As traditional buyers like Japan and China reduce their holdings, the U.S. faces higher borrowing costs. By linking stablecoin issuers to the purchase of Treasury bonds, a new, stable demand is created, potentially curbing interest rate hikes and stabilizing national finances.
A stablecoin is a cryptocurrency pegged to a fiat currency, typically the U.S. dollar. Issuers are required to hold reserve assets equivalent to the value of the tokens they issue. The new law mandates these reserves be invested in U.S. Treasury bonds, providing stable interest income for the issuing companies.