The Stable Coin Strategy: America’s New Debt Reset Mechanism

The United States carries over $37 trillion in debt, and that number grows by approximately $1 trillion every 100 days. The government now spends more than $1 trillion annually just servicing interest payments—more than it spends on defense, more than Medicare. Foreign buyers who traditionally absorbed American debt are stepping back. China has reduced its Treasury holdings. Japan is selling. Yet somehow, the system continues functioning as if nothing is wrong.

The question isn’t whether America faces a debt crisis. The question is how the country plans to manage it. And according to some financial analysts, including a prominent Russian economist, the answer involves cryptocurrency and a playbook the United States has deployed multiple times throughout its history.

The Historical Playbook: Three Previous Debt Resets

To understand where we might be headed, we need to examine where we’ve been. America has executed major monetary resets before, and the pattern is remarkably consistent.

In 1933, President Franklin Roosevelt signed Executive Order 6102, effectively confiscating privately held gold. Americans were required to sell their gold to the government at $20.67 per ounce. Shortly after, the government revalued gold to $35 per ounce. This represented a 67% devaluation of the dollar against gold. If you had $100 in purchasing power before the revaluation, you effectively had $33 afterward. The government’s debt, meanwhile, became 67% cheaper to repay in real terms.

In 1971, President Richard Nixon closed the gold window, severing the dollar’s convertibility to gold. Foreign nations that held dollars expecting to exchange them for gold at $35 per ounce found that promise broken. Since that moment, the dollar has lost approximately 96% of its purchasing power. This wasn’t accidental inflation—it was systematic devaluation that reduced the real burden of government obligations.

Since 2008, America has employed a softer but continuous version of this strategy through quantitative easing. Between 2020 and 2025 alone, the money supply grew from approximately $15 trillion to $22 trillion, representing roughly a 43% increase. This expansion devalued the currency and reduced the real cost of servicing debt. Meanwhile, everything priced in dollars increased: gasoline up 50%, housing up 50%, food up 30%. The nominal debt figure remained $37 trillion on paper, but its real cost to service dropped significantly.

The pattern is unmistakable: America doesn’t default on its obligations. It devalues them.

The Russian Economist’s Theory

At the Eastern Economic Forum, Anton Siluanov, a senior economic adviser to Vladimir Putin who has shaped Russia’s economic strategy since 2012, presented a theory about America’s current debt strategy. His assessment involves cryptocurrency, specifically stablecoins, as the mechanism for the next debt reset.

According to this perspective, America is preparing to use dollar-backed stablecoins to distribute its debt globally, then devalue through systematic inflation while the world absorbs the impact. Siluanov described this as moving debt into “the crypto cloud,” creating a distributed system where the eventual devaluation’s pain gets spread across millions of holders worldwide rather than concentrated domestically.

Many dismissed this as conspiracy theory or geopolitical posturing. But when examined against historical precedent and current regulatory developments, the theory contains elements worth serious consideration.

Why Traditional Devaluation Has Become Problematic

When a government devalues through conventional inflation within its borders, citizens feel the impact immediately. Grocery prices rise. Gas becomes more expensive. Housing costs surge. Consumer Price Index reports make headlines. Political pressure builds. At some point, domestic anger forces policy changes or electoral consequences.

The dollar’s status as the global reserve currency has historically allowed America to export some of this devaluation pain. When the Federal Reserve expands the money supply, the entire world using dollars absorbs part of the impact. This diffusion mechanism has been crucial for managing large-scale monetary expansion without triggering domestic political crises.

However, this system is breaking down. Foreign ownership of US debt has declined from 34% to 23% of total outstanding Treasuries. China has reduced its Treasury holdings by roughly 25%. Japan, once the largest foreign holder, has been selling. These nations observed the 1971 gold window closure. They watched the post-2008 money printing. They’ve learned the playbook, and they’re less willing to participate.

When foreign demand for Treasuries weakens, the entire funding mechanism becomes precarious. Yields must rise to attract buyers. Interest costs explode. The government needs a new mechanism to create Treasury demand that doesn’t rely on increasingly skeptical foreign central banks.

The GENIUS Act and Stablecoin Requirements

The GENIUS Act, passed in early 2025, established a legal framework for dollar-backed stablecoins. The core requirement is straightforward: every stablecoin must be backed by US Treasuries or cash reserves. When someone gives Tether a dollar to mint USDT, Tether must purchase Treasuries. When Circle receives dollars to create USDC, the same requirement applies.

This isn’t theoretical. Tether currently holds approximately $127 billion in US Treasuries. Circle holds roughly $55 billion. Combined, these two stablecoin issuers rank as the 18th largest holder of US debt globally—larger than Germany, larger than South Korea.

Citibank forecasts that stablecoins could potentially hold more US Treasuries than any single foreign country by 2030. Treasury Secretary Scott Bessent has projected stablecoin market capitalization could reach $3.7 trillion by that same year. Current growth rates support these projections. Stablecoin market cap grew approximately 40% in 2025 alone, with transaction volumes up 50% year-over-year.

Every dollar that flows into stablecoins creates automatic Treasury demand. An Argentine citizen buying USDT to escape peso inflation becomes a Treasury buyer. A Turkish business using USDC to avoid lira volatility becomes a Treasury buyer. They’re all funding America’s deficit, whether they realize it or not.

The Distributed Liability Mechanism

Here’s where the structural genius becomes apparent. Traditional dollar inflation through the Federal Reserve is centralized and visible. People can track money supply growth. They can monitor the Fed’s balance sheet. The source and scale of monetary expansion are transparent.

Stablecoins create a different dynamic. The system appears decentralized and market-driven. Tether is a private company. Circle is a private company. Apple could issue a stablecoin. Meta could launch one. This structure doesn’t carry the same political baggage as the Federal Reserve openly printing money. It’s harder to identify a single institution to blame for devaluing savings.

Yet behind this apparently decentralized system, every stablecoin issuer is required by law to purchase Treasuries. The demand is guaranteed. The distribution is global. When devaluation eventually occurs through base currency inflation, it doesn’t hit American citizens first and hardest. It impacts everyone holding stablecoins everywhere simultaneously.

This is what Siluanov likely meant by “moving debt into the crypto cloud.” It’s distributed liability. When debt is concentrated in foreign central banks, those institutions can coordinate to dump holdings. But when debt backs hundreds of millions of stablecoin users scattered across every country, embedded in daily payment systems, they cannot coordinate an exit. They’re structurally locked in.

Historical Precedent: The Plaza Accord

There’s already precedent for coordinated currency devaluation. In 1985, the United States, Japan, West Germany, France, and the United Kingdom signed the Plaza Accord. They agreed to deliberately devalue the dollar by approximately 25% over two years through coordinated intervention. It was planned, executed, and successful.

The difference today is that international agreements aren’t necessary. Global adoption of dollar-backed stablecoins creates the mechanism automatically. Once stablecoins are embedded in payment systems worldwide, once Treasury demand is structurally guaranteed through the system, devaluation can proceed through simple base currency inflation. The debt burden drops in real terms. Holders lose purchasing power proportionally. There’s no default—just devaluation distributed globally.

The Three-Phase Rollout

Phase One involved legislative foundation-building. The GENIUS Act passed, establishing regulatory frameworks and approving licensed issuers. This phase concluded in early 2025.

Phase Two is currently underway. Stablecoin adoption is accelerating beyond initial projections, up 40% in 2025. More corporations are receiving approval to issue stablecoins. Integration into mainstream payment systems continues expanding. The target is $3-4 trillion in market capitalization by 2030.

Phase Three would be the devaluation trigger. Once sufficient dollars are distributed globally through stablecoins, the reset occurs. This could manifest through traditional base currency inflation, through a formal revaluation event, or through both mechanisms simultaneously. The debt burden drops in real terms, dollar purchasing power declines, and everyone holding the tokens shares the economic pain proportionally.

Warning Signals to Monitor

Three indicators would signal the approach of Phase Three. First, acceleration in stablecoin adoption beyond current projections, particularly adoption by major corporations and financial institutions at scale. Second, announcements from large technology companies or financial institutions launching their own stablecoin products. Third, official narratives about “digital dollar modernization” or “bringing the dollar into the 21st century”—this language typically precedes major monetary transitions.

The pattern across 1933, 1971, and 2008 remained consistent: build the mechanism, achieve widespread adoption, then activate the devaluation. The playbook doesn’t fundamentally change. Only the technological tools evolve.

Defensive Positioning

Understanding this potential mechanism doesn’t require panic, but it does suggest certain defensive positions merit consideration. Hard assets that maintain real value during inflationary periods include commodities like gold and oil, real estate, and productive assets. Consumer staple companies and energy sector stocks tend to outperform during inflationary environments because they can pass costs to consumers and maintain real margins.

The key insight is recognizing that nominal debt figures matter less than real debt burdens. When the base currency devalues, everything priced in that currency adjusts. The $37 trillion figure doesn’t change on paper, but its real economic weight diminishes.

The Bottom Line

You won’t hear this framed as debt devaluation strategy in mainstream financial media. It will be presented as innovation, as progress, as making finance more accessible and efficient. Those narratives may have truth on the surface level. Stablecoins do provide utility. They do solve real problems for people in countries with unstable currencies.

But the underlying mechanism serves another purpose simultaneously. For over a century, America has managed unsustainable debt loads through strategic devaluation rather than default. The tools have evolved from gold confiscation to closing the gold window to quantitative easing to, potentially, stablecoin-distributed Treasury demand. The fundamental strategy remains unchanged.

Whether this theory proves accurate or not, the structural incentives and regulatory frameworks now exist to enable exactly this mechanism. That alone makes it worth understanding.