Is US hiding $35 trn debt in crypto? Russia alleges secret stablecoin plot. Here's what we know
Under the GENIUS Act (2025), stablecoin issuers must maintain 1:1 backing in cash or short-term Treasuries and adhere to strict regulatory oversight by the Fed, OCC, and FinCEN. They can’t issue debt, restructure liabilities, or erase obligations.
- Oct 25, 2025,
- Updated Oct 25, 2025 10:00 AM IST
Russia claims the U.S. could use stablecoins to erase $35 trillion in debt. But is that even possible? Real-world regulations, infrastructure, and financial limits say otherwise.
A claim by Vladimir Putin’s adviser Anton Kobyakov has reignited debate on crypto’s role in global finance. At the Eastern Economic Forum, Kobyakov alleged that Washington plans to convert part of its $35–37 trillion debt into U.S.-backed stablecoins, devalue those assets, and "reset the system." The statement, shared by Indian IPR lawyer and analyst Navroop Singh on X, echoes Donald Trump’s past remarks supporting gold and crypto-backed finance.
Here's what we know:
Stablecoins like USDC and USDT are issued by private firms, not the U.S. government. Converting national debt into these digital tokens would be considered a default, not a strategy—especially at a scale of tens of trillions.
Crypto and financial analysts widely view Kobyakov’s claim as geopolitical rhetoric aimed at undermining confidence in U.S. markets. They note that while some stablecoins do hold U.S. Treasury reserves—about $285 billion—the idea of converting the full debt load is structurally impossible under current law.
Under the GENIUS Act (2025), stablecoin issuers must maintain 1:1 backing in cash or short-term Treasuries and adhere to strict regulatory oversight by the Fed, OCC, and FinCEN. They can’t issue debt, restructure liabilities, or erase obligations.
Tokenized Treasuries, like those from Franklin Templeton’s BENJI fund, offer digital exposure to government debt—but as investment products, not debt-erasure tools.
Moreover, the technical challenges are significant: 24/7 blockchain operations don’t align with traditional banking hours, and regulatory compliance adds layers of friction.
In short: while the U.S. is exploring blockchain-based finance and stablecoins do hold government debt, there's no pathway—legal or practical—for transforming sovereign debt into crypto-backed assets for the purpose of devaluation or default.
Russia claims the U.S. could use stablecoins to erase $35 trillion in debt. But is that even possible? Real-world regulations, infrastructure, and financial limits say otherwise.
A claim by Vladimir Putin’s adviser Anton Kobyakov has reignited debate on crypto’s role in global finance. At the Eastern Economic Forum, Kobyakov alleged that Washington plans to convert part of its $35–37 trillion debt into U.S.-backed stablecoins, devalue those assets, and "reset the system." The statement, shared by Indian IPR lawyer and analyst Navroop Singh on X, echoes Donald Trump’s past remarks supporting gold and crypto-backed finance.
Here's what we know:
Stablecoins like USDC and USDT are issued by private firms, not the U.S. government. Converting national debt into these digital tokens would be considered a default, not a strategy—especially at a scale of tens of trillions.
Crypto and financial analysts widely view Kobyakov’s claim as geopolitical rhetoric aimed at undermining confidence in U.S. markets. They note that while some stablecoins do hold U.S. Treasury reserves—about $285 billion—the idea of converting the full debt load is structurally impossible under current law.
Under the GENIUS Act (2025), stablecoin issuers must maintain 1:1 backing in cash or short-term Treasuries and adhere to strict regulatory oversight by the Fed, OCC, and FinCEN. They can’t issue debt, restructure liabilities, or erase obligations.
Tokenized Treasuries, like those from Franklin Templeton’s BENJI fund, offer digital exposure to government debt—but as investment products, not debt-erasure tools.
Moreover, the technical challenges are significant: 24/7 blockchain operations don’t align with traditional banking hours, and regulatory compliance adds layers of friction.
In short: while the U.S. is exploring blockchain-based finance and stablecoins do hold government debt, there's no pathway—legal or practical—for transforming sovereign debt into crypto-backed assets for the purpose of devaluation or default.