U.S. federal government interest payments on national debt exceeded $1 trillion for the first time in fiscal year 2025. Interest payments now surpass both defense spending and Medicare expenses – for the first time in U.S. history.
Wall Street analysts and social media users refer to “Weimar” as warnings of a financial crisis increase. Meanwhile, the U.S. Treasury is striving to make stablecoins a strategic tool for absorbing the growing national debt into the markets.
Numbers: crisis visible
In fiscal year 2020, net interest payments totaled $345 billion. By 2025, this figure nearly tripled to $970 billion – surpassing defense spending by about $100 billion. When all public debt interest is accounted for, the figure exceeded $1 trillion for the first time.
The Congressional Budget Office predicts that cumulative interest payments over the next decade will rise to $13.8 trillion – nearly double the inflation-adjusted amount compared to the last two decades.
The Committee for a Responsible Federal Budget warns that in an alternative scenario – where tariffs are declared illegal and recent legislative temporary provisions are made permanent – interest costs could rise to $2.2 trillion by 2035. This would be 127% more than the current level.
Why this is unprecedented
The debt-to-GDP ratio is now 100%, a level not reached since World War II. By 2029, this ratio will exceed the 1946 peak of 106% and continue rising to 118% by 2035.
Most concerning is the self-feeding nature of the crisis. The federal government borrows about $2 trillion annually, of which about half goes solely to paying interest on existing debt. CRFB analyst Chris Towner warned of a potential “debt spiral”: “If lenders begin to doubt whether everything will be repaid, the result could be higher interest rates – which means we’ll need to borrow even more to pay the interest.”
Historical First Year Significance Interest payments exceed defense spending 2024 For the first time since World War II Interest payments exceed Medicare expenses 2024 Debt service costs became the largest health expenditure Debt rises to 100% of GDP 2025 For the first time since World War II Debt surpasses the 1946 peak (106%) 2029 Will exceed the all-time historical record
Source: BeInCrypto Market Reaction: Weimar and buy gold
Social media reacted strongly to these predictions. “The trend is not sustainable unless addressed,” one user wrote. Another referenced the term “weimar,” referring to the hyperinflation in Germany in the 1920s. “The era of debt servicing,” noted another, describing the mood that the U.S. has entered a new era.
The majority supported the shift to tangible assets – gold, silver, and real estate. Notably, Bitcoin was mentioned only rarely, indicating that the traditional “gold bug” mentality still dominates the sentiment of private investors.
Market impacts
In the near future, the increasing issuance of government bonds will absorb market liquidity. As the yields on risk-free investments approach 5%, stocks and cryptocurrencies face structural challenges. In the medium term, public finance pressure may tighten regulation and increase cryptocurrency taxation.
In the long term, a paradox emerges for crypto investors. As economic instability grows, the narrative of Bitcoin as “digital gold” strengthens. The worse traditional finance performs, the stronger the justification becomes to invest in assets outside the system.
Stablecoin: crisis meets solution
Washington has gained a surprising ally in its economic troubles. The GENIUS Act, signed in July 2025, requires stablecoin issuers to hold 100% reserves in U.S. dollars or short-term government bonds. This effectively makes stablecoin companies structural buyers of government debt.
Finance Minister Scott Bessent called stablecoins a “revolution in digital finance,” which “will cause a tremendous surge in the demand for U.S. government bonds.”
Standard Chartered estimates that stablecoin issuers will buy $1.6 trillion worth of government bonds over four years – enough to cover all new issuance during Trump’s second term. This would surpass China’s current holdings of $784 billion and turn stablecoins into a new type of debt buyer as foreign central banks reduce their exposure to U.S. debt.
The debt servicing era begins
The U.S. economic crisis opens surprising doors for cryptocurrencies. As traditional investors rush towards gold, stablecoins are quietly becoming a critical part of the U.S. debt markets. Washington’s approach to stablecoin regulation is no longer just about innovation – it's now about survival. The era of debt servicing has begun, and cryptocurrencies may be its unexpected winners.
