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Interest payments on the U.S. federal government’s national debt exceeded $1 trillion for the first time in fiscal year 2025. Interest expenditures now exceed defense spending and Medicare payments—for the first time in U.S. history.
Wall Street analysts and social media users cite the term “Weimar” as warnings of a financial crisis. At the same time, the US Treasury is positioning stablecoins as a strategic tool to absorb the growing deluge of government debt.
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Numbers: A clearly visible crisis
Net interest payments in fiscal year 2020 were $345 billion. By 2025, this number will nearly triple to $970 billion, surpassing defense spending by about $100 billion. When you count all the interest on the public debt owned, the figure exceeded $1 trillion for the first time.
The Congressional Budget Office projects that cumulative interest payments over the next decade will reach $13.8 trillion, nearly double the amount spent after adjusting for inflation over the past two decades.
The Committee for a Responsible Federal Budget warned that in an alternative scenario in which the tariffs are deemed illegal and the provisions of the recent temporary laws become permanent, interest costs could reach $2.2 trillion by 2035 – a 127% increase from current levels.
Why is this unprecedented?
The debt to GDP ratio reached 100%, a level not seen since World War II. In 2029, the proportion will exceed the peak of 106% in 1946 and will continue to grow, reaching 118% in 2035.
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Of particular concern is the self-reinforcing nature of the crisis. The federal government borrows about $2 trillion a year, with only about half of that amount earmarked for servicing the existing debt. Federal Budget Committee analyst Chris Towner warned of the potential for a “debt spiral”: “If those who lend us worry that we can’t repay all the money, we could see interest rates rise – which means we need to borrow more to pay the interest,” said Towner.
| The first of its kind historically | Sunnah | Importance |
|---|---|---|
| Interest waived for defense expense | 2024 | For the first time since World War II |
| Better health care benefits for the elderly | 2024 | Debt service has become the largest health care expense |
| Debt reaches 100% of GDP | 2025 | For the first time since World War II |
| Debt exceeds 1946 peak (106%) | 2029 | It will surpass the all-time record |
Market reaction: “Weimar” and “buy gold”
Social media lit up at these predictions. A user wrote that the path is not sustainable if it does not change. Another user referred to “Weimar” in reference to hyperinflation in Germany during the 1920s. Another user stated that “the era of debt service” had begun, capturing the feeling that America had entered a new phase.
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The vast majority called for a return to hard assets – gold, silver and real estate. There is almost no mention of Bitcoin, which suggests that the traditional thinking of gold lovers still dominates the sentiment of individual investors.
Effects on the market
The increased issuance of Treasury bills absorbs liquidity in the market in the short term. With risk-free asset returns close to 5%, stocks and crypto-currencies face structural headwinds. In the medium term, financial pressure may accelerate the regulatory tightening and taxation of cryptocurrencies.
In the long run, however, it presents a paradox for cryptocurrency investors. As financial instability deepens, the narrative of Bitcoin as “digital gold” grows louder. The worse the traditional finance, the stronger the argument in favor of assets outside the system.
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Stablecoins: Crisis meets solution
Washington has found an unexpected ally in its financial crisis. The GENIUS Act, signed in July 2025, requires stablecoin issuers to hold 100% reserves in US dollars or short-term US Treasury bills. 100% . This effectively turns stablecoin companies into primary buyers of government debt.
Treasurer Scott Bessent announced Those stablecoins “A revolution in digital finance” and that “will lead to a large increase in demand for US Treasury bonds.”
Standard Chartered esteemed That the issuers of stablecoins They will buy $1.6 trillion in Treasury bonds over four years — enough to absorb all new issuance during Trump’s second term. This exceeds China’s current holdings of Treasuries by $784 billion, positioning stablecoins as alternative buyers as foreign central banks reduce their exposure to US debt.
The beginning of the era of debt service
America’s financial crisis paradoxically opens the doors to digital currencies. While traditional investors rush to gold, stablecoins are quietly becoming vital infrastructure for US debt markets. Washington’s embrace of stablecoin regulation isn’t just about innovation — it’s about survival. The era of debt service has begun, and cryptocurrencies can be an unexpected benefit.
