Cryptocurrency and Stablecoins: How the US Uses Digital Assets to Devalue $37 Trillion in Debt

Background: Putin Advisor’s “Explosive” Remarks

At the Eastern Economic Forum in Russia, Kremlin senior advisor Anton Kobyakov made a bold assertion: the United States is planning to systematically devalue its $37 trillion in national debt through cryptocurrencies and stablecoins in a nearly imperceptible way.

It sounds like a fairy tale. But this is not a baseless speculation. MicroStrategy founder and billionaire Michael Saylor once proposed a highly controversial idea to Trump: sell all U.S. gold reserves and concentrate on buying Bitcoin, aiming to accumulate 5 million coins. His logic was: this would suppress gold prices, weaken assets of competitors like China and Russia, while boosting Bitcoin prices and reshaping America’s balance sheet.

The question is: is all this really feasible?

Understanding the Economics of “Debt Devaluation”

Let’s explain this concept in the simplest way.

Suppose all global wealth equals a $100 bill. I borrow this $100 and must repay it fully. Theoretically, I should return $100. But I have a special advantage: I control the issuance of the global reserve currency.

So, instead of repaying that original $100, I print a new $100 bill out of thin air. What happens?

Liquidity goes from $100 to $200, but global assets like real estate, cars, commodities, and resources do not increase. This causes prices to rise across the board: real estate, stocks, gold—everything doubles. Something that cost $1 now costs $2.

This is inflation.

When I “repay” your $100, on the surface I fulfill the debt, but in reality, the purchasing power of the money you receive has already shrunk by 50%. I haven’t defaulted, but I have successfully devalued the debt through currency dilution.

This is not a new trick

It’s important to note that debt devaluation is not an invention of the U.S., nor a new strategy. It is the oldest and most common form of debt repayment in human history, and the U.S. is a master of this method.

Devaluing debt does not mean default or refusal to pay. It simply involves using inflation or currency manipulation to reduce the real value of the debt—this trick has been repeatedly played throughout history: after WWII, during the 1970s stagflation, and in the post-pandemic money-printing phase.

So when the Russian advisor claims “the U.S. might devalue debt through cryptocurrencies,” he is describing not a new mechanism, but a tactic the U.S. has mastered for decades.

The real shift is: stablecoins can extend this mechanism globally.

The True Power of Stablecoins: Dispersed Debt Structure

The key is not “simply converting $37 trillion into stablecoins,” but flooding the world with stablecoins backed by U.S. Treasuries, dispersing America’s debt structure into global holders.

When the dollar depreciates due to inflation, all stablecoin holders share the losses collectively.

Here’s a fundamental economic fact many overlook: the natural state of the economy should be deflationary. That is, if the money supply is fixed, goods should become cheaper over time with technological progress and increased productivity. But that’s not what we see. The only reason is: governments can create money without limit.

The new liquidity needs an outlet to avoid devaluation. So, funds flow into real estate, stocks, gold, Bitcoin, and other assets. In the long run, these assets seem to always rise. But the truth is: they only maintain purchasing power while the dollar, which supports everything, is constantly devaluing. It’s not asset appreciation, but dollar devaluation.

The Two Major Advantages of Stablecoins: Coverage + Control

What if the U.S. could expand this privilege? What if it could replicate this trick worldwide? That’s the brilliance of stablecoins.

The problem with traditional inflation is that the economic pain is immediate: Americans see rising grocery bills, soaring housing prices, higher energy costs, and the Fed possibly raising interest rates to curb the economy, causing CPI and consumer prices to spike, leading to public discontent.

But stablecoins are different. Because they typically hold reserves in U.S. short-term Treasuries, increasing stablecoin issuance boosts demand for dollars and U.S. debt, creating a self-reinforcing cycle.

When USDT and USDC are widely used globally, they are essentially digital IOUs backed by U.S. Treasuries. This means the burden of U.S. debt financing is “invisibly” shifted onto global users.

In other words, if the U.S. devalues debt through inflation, the costs are not only borne by American citizens but are also “exported” worldwide via the stablecoin system. Inflation becomes an invisible tax that global stablecoin holders are forced to share. Their digital dollars’ purchasing power also shrinks.

From a technical perspective, the current system already operates this way. The dollar is everywhere, but as the stablecoin market grows larger, it will appear in people’s smartphones.

Another key point: Stablecoins may appear politically neutral because they are issued by private companies rather than governments. This means they do not carry the political baggage of the Federal Reserve or Treasury.

According to the U.S. “Stablecoin Act,” only approved issuers—such as banks, trust companies, or specially authorized non-bank entities—can issue dollar-backed stablecoins in the U.S. In theory, companies like Apple or Meta could issue their own digital currencies if they wish. What’s truly needed is not a technological breakthrough but political permission. Frankly, as long as they are close enough to power centers and invest sufficient capital, they can get the green light.

This is why stablecoins are so critical in the process of U.S. debt devaluation: they offer near-CBDC (central bank digital currency) control while avoiding the political sensitivities associated with CBDCs globally.

The Fatal Weakness: Trust Cannot Be Fully Verified

The problem is, other countries are not convinced. We’ve already seen many central banks buying large amounts of gold.

Stablecoins claim to be pegged 1:1 with the dollar or U.S. Treasuries. In theory, each circulating stablecoin should be backed by $1 cash or equivalent bonds. But the real issue is: individuals and foreign governments cannot independently audit these reserves with 100% certainty.

Tether and Circle publish reserve reports, but you must trust the issuers and auditors, which are almost all within the U.S. system. When trillions of dollars are involved, this trust barrier is extremely high among nations.

Even if future blockchain technology enables real-time transparent audits of stablecoin reserves, it won’t solve the deeper issue: the U.S. always retains the right to change the rules.

History has given clear warnings. The U.S. government once promised that the dollar could be exchanged for gold at any time, but in 1971, Nixon unilaterally severed that link. From a global perspective, this was a complete “rule change”: the promise remained, but the fulfillment ended with a simple “that was a joke.”

Therefore, a digital token system based on “trust us” is almost impossible to earn worldwide trust. From a technical standpoint, nothing can prevent the U.S. from taking actions similar to cutting the dollar’s link to gold in the future. This is the fundamental reason why the world remains extremely cautious about the new generation of digital currency systems.

Will the U.S. Really Do This?

My view is: not only is it possible, but it’s almost inevitable; the U.S. is already attempting it, just in different ways.

For example, Saylor openly suggested to Trump that the U.S. establish a Bitcoin strategic reserve. His idea was: if the U.S. sells large amounts of gold to buy Bitcoin, it could suppress gold prices, weaken China and Russia, and simultaneously boost Bitcoin prices to reshape the U.S. balance sheet.

But it never happened. During Trump’s term, the idea of a Bitcoin strategic reserve was only mentioned verbally and was never implemented. The U.S. government explicitly stated it would not use taxpayer money to buy Bitcoin, at least publicly, and no concrete actions were seen.

So I believe it won’t happen exactly as Saylor envisioned. But that’s not the end of the story. The government doesn’t need to participate directly to be involved. The real “backdoor” is in the private sector.

MicroStrategy has already become a “public Bitcoin company,” continuing to accumulate Bitcoin under Saylor’s leadership, holding hundreds of thousands of coins. The question then arises: if a publicly traded company accumulates large amounts of Bitcoin first, isn’t that safer and more covert than direct government purchases?

This way, it wouldn’t be seen as central bank intervention, nor would it trigger immediate panic in global markets. Once Bitcoin truly establishes itself as a strategic asset, the U.S. government could indirectly gain exposure by buying shares or acquiring stakes—similar to what it did with Intel; such precedents already exist.

Instead of openly selling gold, investing billions into Bitcoin, or forcibly pushing a stablecoin system, a smarter and more American-style approach is to let private enterprises experiment first. Once the model proves effective and significant, the government can incorporate and institutionalize it.

This method is more covert, gradual, and “deniable,” until one day everything is officially disclosed.

Conclusion

There are many ways for all this to become reality, and the likelihood is high. The Russian advisor’s judgment is not unfounded: if the U.S. truly aims to fundamentally solve its debt problem, some form of digital asset strategy is almost inevitable. When the U.S. finally needs to devalue its debt, widespread use of cryptocurrencies and stablecoins will be the most convenient and least resistant tools. This slow reshaping of financial power is already underway.