The world economy is going through a period of transformation and the formation of completely new trends in the monetary policy of central banks. Investments in U.S. Treasury bonds may become one of the attractive areas for the crypto market.
How government debt is formed
According to data from the Institute of International Finance, total global debt exceeded $323 trillion in the last quarter of 2024, amounting to 326% of GDP. Developed countries accounted for about two-thirds of that amount, with the U.S. and Japan having the largest share.
As of December, 2024 the U.S. national debt exceeded $36 trillion, which is the absolute maximum. At the same time, its growth rate accelerated. From 2010 to 2020, the U.S. national debt increased by $10 trillion - from $13 trillion to $23 trillion. By a comparable amount ($10.8 trillion or 46.5%) it has grown in just four years since the beginning of the pandemic.
The main reason for this movement is considered to be the country's chronic budget deficit. Also, the collateral burden, i.e. the interest that the government pays to debt holders, is continuously growing. Statista analysts project the budget deficit to remain at $1.48 trillion a year through 2029. As of February 2025, debt service cost $952 billion a year. And due to the interest rate FED remaining above 4.25%-4.5%, this amount will rise further.
To cover the deficit, the Federal Reserve has resorted to printing additional money to pay off loans. Until about 2015, the United States was increasing the share of foreign ownership of government debt. At its peak in 2011, this indicator was equal to 49%. Recently, the trend has reversed, reaching 29% by the end of 2023.
If the trend continues, the need for new financing sources will inevitably arise.. A hypothetical scenario for getting out of this situation is the use of RWA, or more precisely, the development of the market of regulated stablecoins pegged to the US dollar.
The two largest stablecoins are USDT and USDC
Let's take a look at the reserves of Tether, the issuer of the USDT stablecoin. According to the company's report dated the fourth quarter in 2024, its reserves totaled $143.7 billion. More than 82% ($118.3 billion) of that is in "cash, cash equivalents, and other short-term deposits." Of that, nearly 79.83% ($94.4 billion) is held in Treasuries. This means that USDT assets are at least 65% backed by US government debt.
A similar report from USDC issuer Circle as of March 27, 2025 shows that this stablecoin's reserves are 88% ($53.5 billion) backed by assets from the BlackRock-managed Circle Reserve Fund, which also invests in Treasuries.
According to Circle, 39% of assets ($21.3 billion) are invested directly in U.S. government debt. The remaining 45% ($28.3 billion) is in REPO deals to repurchase such securities. Other USDC reserve assets as of February 4, 2025 are in cash held at regulated financial institutions
If we add up the collateralization of USDT and USDC coins by the US government debt, we get $144 billion. This is the amount that underlies their reserves. Comparing the figure with data from Statista as of December 2024, we find that the two largest stablecoins hold a slightly bigger share of U.S. government debt than Saudi Arabia.
Although these volumes are small compared to the total amount of government debt, due to their distributed nature, stablecoins are able to make up for the share of foreign companies.
Restrictive measures and sanctions on fiat, as well as the simplification of mutual settlements, may become factors in the adoption and development of the market for such coins.
DeFi and its impact on government debt
Also worth noting is the sector of government bond investing DeFi applications that issue tokenized assets on blockchain. As of March 2025, the market capitalization of such products exceeded $5.1 billion. In less than three months, the sector has grown by $1.5 billion from $3.5 billion at the start of 2025.
BlackRock and Franklin are the largest issuers of tokenized government debt products. These companies are also active participants in the spot bitcoin and Ethereum ETF market.
Unlike centralized stablecoins like USDT and USDC, such RWA platforms provide returns to token holders. While issuers of stablecoins take all profits for themselves, the latter build a business on intermediation, earning processing fees.
For example, Tether's net profit in 2025 was $13B, of which ~$7 billion came from interest income from the U.S. Treasuries and repo holdings.
In terms of raising capital to buy government debt, RWA platforms look much more attractive. Investors could use these tokens in other DeFi applications, potentially increasing profits and bringing additional liquidity to the crypto market.
In parallel, more and more experimental stablecoins are being created. In early June 2024, Paxos, the issuer of PayPal USD (PYUSD), Pax Dollar (USDP) and Pax Gold (PAXG) presented Lift Dollar. This steblecoin is pegged to the US dollar, it will provide users with a return of 5% - the same interest from investing in government debt.
DAI Algorithmic Stablecoin
The issuer of the algorithmic stablecoin DAI is MakerDAO. The asset is backed by coins and tokens including ETH, WBTC, USDC, and UNI. However, MakerDAO, as part of the development of the RWA-direction, issues loans secured by classic securities.
Starting in 2022, the organization began investing in short-term U.S. Treasuries and corporate bonds. By mid-2023, through a partnership with DeFi-focused advisory firm Monetalis, MakerDAO's investments in U.S. government debt had totaled $1.2 billion.
In addition to direct investments in Treasury securities, the token is backed by the USDC. Given that Circle holds assets in government bonds, the share of US government obligations to DAI is even higher.
What is the usefulness of investing in government debt for the crypto market
More than 15 years have passed since the creation of the first bitcoin block. Its hash contains the title of the article "Chancellor on brink of second bailout for banks," which appeared in The Times of London at the sunset of the 2008 financial crisis.The imperfection of the traditional economy allowed bitcoin and its analogs to gain popularity. For a long time it was believed that they would become an alternative or even a replacement for the existing financial system.
However, despite the ideological contradictions between the cryptocurrency and traditional markets, we see a gradual merging of the two economies. Companies have learned to capitalize on both "worlds", where such symbiosis benefits all its participants.
For example, Tether in May 2023 announced that it would allocate up to 15% of its profits to bitcoin. According to a report for 2025, the company's investments in the first cryptocurrency amounted to more than $7.8 billion.
It turns out that the U.S. government as the center of global monetary policy, paying interest on the national debt, not only ensures the stability of the USDT, but also indirectly finances the purchase of bitcoin. This has also allowed Tether to invest in related markets: Industry infrastructure, P2P communications, as well as renewable energy and mining.
Thus, we can see how government debt is fueling the bitcoin ecosystem and helping it grow stronger.
