On September 8, 2025 Russia has accused the United States of devising a cunning plan to erase its staggering $35 trillion national debt using cryptocurrency, a claim amplified by a senior adviser to Vladimir Putin. The adviser alleges that Washington intends to “shove debt into stablecoins, devalue it, and reset the system,” suggesting a deliberate strategy to offload financial burdens onto the global economy. This accusation follows the recent signing of the GENIUS Act by President Trump last month, America’s first federal cryptocurrency law, which mandates that stablecoins be fully backed 1:1 with U.S. Treasuries and cash, enforces public audits and AML/KYC compliance, and allows private companies to issue digital dollars. The timing of Russia’s critique aligns with growing international unease about U.S. financial maneuvers, though the claim lacks hard evidence of an intentional debt erasure plot.

The GENIUS Act, hailed as a stroke of brilliance by its supporters, creates a system where every $1 of digital dollars issued by private firms like Circle (behind USDC) generates $1 of demand for U.S. Treasuries, effectively turning stablecoins into a tool for cheap financing without printing new money. Stablecoin issuers retain 100% of the Treasury yields—currently over 4%—turning the arrangement into a risk-free profit engine for the private sector while boosting demand for government debt. For instance, Circle reportedly earns around $2 billion annually from Treasury yields backing USDC, and scaling this across $100 billion, $1 trillion, or even $10 trillion in stablecoins could quietly fund U.S. debt while exporting digital dollars globally. This mechanism, while innovative, raises eyebrows as it could allow the U.S. to service its debt “on time” while inflation—running at 5%—erodes the real value, effectively paying back less in purchasing power.

The geopolitical implications are massive, giving the U.S. a strategic edge as China debates its digital yuan and Europe’s MiCA regulations stifle innovation. Russia’s accusation taps into a narrative that the U.S. is weaponizing this system to maintain dollar dominance, with private firms doing the heavy lifting to reduce borrowing costs without new taxes or money printing. Critics might argue this is less a conspiracy and more a pragmatic response to a $35 trillion debt, where Treasury holders—like foreign central banks—face a 1% annual loss in real terms if yields lag inflation. Whether genius or manipulation, the plan’s success hinges on global acceptance of these digital dollars, making Russia’s outrage a signal of the high-stakes financial chess match underway, with the U.S. potentially turning a profit engine into a geopolitical lever.