Former US Treasury Secretary Henry Paulson urged authorities to develop an emergency action plan in case of a collapse in US government bonds.
The US government bond market, valued at $31 trillion, serves as the foundation of the global financial system. The US national debt has already exceeded $39 trillion. Economists have been warning for years about a possible "death spiral": investors begin to demand higher yields due to the risks of growing debt, which increases interest payments and widens the deficit. If the Treasury cannot raise the necessary funds, the Federal Reserve may become the main buyer of bonds - effectively starting to print money.
For the crypto market, the scenario is twofold. On one hand, a crisis of confidence in the dollar and US debt obligations could trigger a flight to alternative assets - bitcoin and gold. On the other hand, 63% of Tether's reserves consist of US government bonds. In a crisis in this market, the largest stablecoin would come under pressure: a wave of redemptions could force Tether to sell bonds in a falling market, creating a risk of depegging.
On the same day, the US Treasury conducted the largest debt buyback in history - $15 billion, buying back old securities maturing in 2026-2028.
National debt exceeded $39 trillion