Gold and crypto become pawns in U.S.-Russia debt strategy battle

An adviser to Russian President Vladimir Vladimir Putin has accused the U.S. of using stablecoins and gold to devalue its massive $35 trillion debt, arguing that such a strategy could undermine global trust in the dollar. Speaking at a press briefing during the Eastern Economic Forum in Vladivostok, Anton Kobyakov, a deputy chairman of the forum’s organizing committee and a senior Putin adviser, stated that the U.S. is “trying to rewrite the rules of the gold and cryptocurrency markets” to shift its debt burden onto the rest of the world. Kobyakov compared this strategy to historical precedents such as the 1930s and 1970s, when the U.S. allegedly leveraged geopolitical and economic shifts to its advantage [1].

Kobyakov elaborated that the U.S. intends to move its debt into dollar-backed stablecoins, which would allow it to devalue that debt and “start from scratch.” He suggested that this approach could serve as an alternative to the traditional global currency system, positioning crypto and gold as instruments for reshaping financial power dynamics [1]. One of the proposed mechanisms for this strategy is the Bitcoin Act introduced by U.S. Senator Cynthia Lummis, which outlines a plan for the federal government to purchase and hold Bitcoin over an extended period.

The U.S. national debt, currently standing at $37.43 trillion according to Treasury data, has grown significantly since 1981, when it was under $4 trillion. This rapid expansion has raised concerns among analysts and policymakers about the long-term sustainability of the debt and the potential for economic instability [1].

U.S. officials have defended the use of stablecoins as a means to reinforce the dollar’s global dominance. In March, U.S. Treasury Secretary Scott Bessent stated that stablecoins would be used to maintain the U.S. dollar’s status as the world’s reserve currency. Former House Speaker Paul Ryan also expressed support in July 2024, noting that stablecoins could create demand for U.S. public debt and help the country maintain its geopolitical edge [1].

In July, President Donald Trump signed the Guiding and Establishing National Innovation for US Stablecoins Act (GENIUS Act) into law, marking a significant regulatory development for the U.S. stablecoin market. The legislation aims to establish a clear legal framework for the issuance and trading of stablecoins, signaling a more structured and supportive regulatory environment for the asset class [2].

Meanwhile, Russia is also advancing its own stablecoin initiatives. In June, state media reported that a new ruble-backed stablecoin—A7A5—was in development and set to launch on the Tron blockchain. This move reflects a broader strategy by Russian officials to reduce dependency on U.S. dollar-backed stablecoins, particularly Tether (USDT), which has been used for oil trade settlements with China and India [1].

Although Russia previously banned crypto payments in 2022, the country has since taken a more open stance, allowing financial institutions to offer crypto-based products to accredited investors as of May. These developments suggest a cautious but growing integration of crypto into the Russian financial system [1].

The growing interplay between geopolitics, national debt, and digital assets continues to shape global financial dynamics, with both the U.S. and Russia positioning stablecoins as strategic tools in an evolving economic landscape.

Source:

[1] Putin Advisor Says US Is Using Stablecoins To Devalue Its Debt (https://cointelegraph.com/news/us-is-using-stablecoins-devalue-debt-putin-advisor)

[2] Putin Advisor Accuses US of Using Crypto, Gold to Escape Debt (https://finance.yahoo.com/news/putin-advisor-accuses-us-using-214522644.html)