U.S. Treasury interest expenses exceed one trillion dollars; stablecoins may become a key variable under U.S. debt pressure

The US Treasury is facing unprecedented pressure. In the fiscal year 2025, the US federal government’s interest payments on national debt will exceed $1 trillion for the first time, surpassing defense spending and also exceeding healthcare expenditures, setting a record. This change has sparked widespread discussions about the sustainability of US finances and has also brought the role of stablecoins into sharp focus within the macro financial system.

Data shows that in the fiscal year 2020, the US net interest expense was only $345 billion, but by 2025, it has approached $970 billion; including all public debt interest, the total officially surpasses $1 trillion. The Congressional Budget Office estimates that over the next decade, cumulative interest payments will reach $13.8 trillion, nearly double the amount of the past twenty years. Some institutions even warn that in a more pessimistic scenario, annual interest payments could rise to $2.2 trillion by 2035.

The core issue lies in the imbalance between debt and economic size. The current US federal debt is already equivalent to 100% of GDP and is expected to continue rising over the next decade. This structure has obvious “self-reinforcing” characteristics: the government needs to borrow more to pay existing debt interest. Once market confidence declines and interest rates rise, the debt burden will further increase, forming a potential debt spiral.

This outlook has triggered intense reactions on social media, with keywords like “Weimar inflation” and “buy gold” frequently appearing, reflecting market concerns about the stability of the fiat currency system. In the short term, large-scale issuance of government bonds has absorbed market liquidity. With risk-free rates approaching 5%, both stocks and crypto assets are facing valuation pressures.

However, from a long-term perspective, stablecoins are gradually revealing strategic significance. The “GENIUS Act” passed in 2025 requires stablecoin issuers to hold 100% USD or short-term US debt reserves, effectively turning them into structural buyers of US Treasuries. Standard Chartered Bank predicts that over the next four years, stablecoin issuers may absorb approximately $1.6 trillion in US debt, becoming an important force in the global debt landscape.

Against the backdrop of a gradually unfolding debt repayment era, US regulation and acceptance of stablecoins are no longer just about financial innovation but are part of the self-regulation of the fiscal system. As traditional systems come under pressure, crypto assets and stablecoins may play a more critical role in global capital flows.