US Plans to Devalue National Debt Using Bitcoin and Stablecoins: Global Reactions and Pakistan’s Role

Sep 13, 2025

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The United States is exploring an unprecedented approach to manage its mounting national debt, which now exceeds $37 trillion. The proposal involves leveraging cryptocurrencies, particularly Bitcoin and stablecoins, to restructure and potentially devalue its obligations. This strategy, which combines a Strategic Bitcoin Reserve with a newly proposed U.S.-issued stablecoin, has drawn attention from global financial analysts, policymakers, and international governments.

The plan has sparked controversy, with Russia issuing strong warnings about market destabilization, and Pakistan emerging as a strategic partner in Bitcoin-related financial initiatives.

The US Strategy to Manage National Debt

Key Components

Component	Description	Objective
Strategic Bitcoin Reserve	Acquire up to 1 million Bitcoins over 5 years	Hedge against inflation and offset national debt
New Stablecoin (USAT)	Issued by Anchorage Digital Bank, fully backed by liquid assets	Convert portions of debt into digital assets to devalue obligations
Digital Asset Stockpile	Include Bitcoin and other seized digital assets	Serve as a reserve for financial leverage or liquidation
Debt Offset Plan	Use crypto reserves to reduce real value of U.S. obligations	Reduce effective debt burden without traditional fiscal measures

The underlying logic is that by holding digital assets, the U.S. could effectively decrease the real value of its debt as cryptocurrency valuations rise, providing a non-traditional path for debt management.

Mechanism: Bitcoin and Stablecoins

Bitcoin Reserve: The government plans to acquire significant amounts of Bitcoin over the next few years, creating a national reserve that can act as a store of value or be liquidated in times of need.
Stablecoin Issuance: The U.S. may issue USAT, a stablecoin pegged to the U.S. dollar. This digital currency would allow portions of debt to be converted into crypto form, effectively “devaluing” obligations while maintaining liquidity.
Collateral and Custody: Digital assets will be held by regulated institutions with robust custody solutions to ensure security and compliance.

Russia’s Response

Russia has publicly criticized this initiative, calling it an attempt to manipulate global financial markets:

Comment by Russia	Implication
Accuses the U.S. of using cryptocurrencies and gold to devalue $35 trillion in debt	Suggests manipulation of global markets
Warns that this could undermine trust in the U.S. dollar	Potential destabilization of global financial systems
Calls the plan a “rewrite of the rules” for financial markets	Signals geopolitical tension and scrutiny

Russia views the move as potentially destabilizing to international economic order, as it may shift the balance between traditional fiat currencies and emerging crypto assets.

Pakistan’s Role as a Bitcoin Partner

Pakistan has shown interest in joining U.S. initiatives around Bitcoin and digital asset development. Analysts suggest Pakistan could act as a strategic partner for several reasons:

Collaborative Crypto Initiatives: Pakistan is exploring legal frameworks to support cryptocurrency adoption.
Regional Influence: Partnering with the U.S. on Bitcoin projects may provide Pakistan with technological expertise and international leverage.
Financial Diversification: Holding or managing portions of the Bitcoin reserve could diversify national reserves and stabilize local currency initiatives.

Pakistan’s Engagement	Potential Benefits
Participation in Bitcoin reserve management	Strategic collaboration with the U.S.
Development of digital asset infrastructure	Boost financial technology ecosystem
Regional financial influence	Enhance Pakistan’s global crypto footprint

Potential Impact on U.S. Debt

The initiative could have both financial benefits and risks:

Scenario	Potential Outcome
Optimistic	Rising Bitcoin prices allow a significant portion of U.S. debt to be offset; reduces real debt burden
Moderate	Stablecoins provide liquidity, maintain market stability, partial debt reduction
Pessimistic	Crypto volatility leads to financial instability; global markets question U.S. dollar reliability

Global Reactions

Financial Analysts: Mixed opinions; some see it as innovative, others as highly risky.
International Governments: Russia criticizes it; European and Asian countries are observing closely.
Investors: Crypto markets could experience increased volatility due to such high-level adoption.

Conclusion

The U.S. plan to leverage Bitcoin and stablecoins for national debt management represents a bold, unconventional approach to global finance. While it offers potential benefits such as debt reduction, inflation hedging, and digital asset expansion, it also carries significant risks, including market volatility, geopolitical backlash, and scrutiny from global financial institutions.

With Russia voicing warnings and Pakistan positioning as a strategic crypto partner, this initiative is not just about finance—it’s about geopolitical strategy, economic innovation, and the future of global monetary systems.

The coming years will reveal whether cryptocurrencies can play a central role in sovereign debt management or if this experiment becomes a cautionary tale for nations experimenting with digital assets.