Global debt hit a record $365 trillion, while stablecoin issuers are emerging as a new major buyer of short-term U.S. Treasuries, blockchain media outlet Cryptopolitan reported on Oct. 1.

The Institute of International Finance said in a global debt monitor released on Sept. 23 that global debt totalled $365 trillion as of early this year.

Debt rose by $10 trillion over six months to early this year. The IIF cited increased borrowing by emerging markets, AI infrastructure investment and military spending. Emerging market debt rose by $6.5 trillion to $110 trillion, and China was singled out as the biggest driver of the increase.

The pace of increase slowed from the same period a year earlier. Debt had risen by $21 trillion in the same period of the prior year. The IIF said high interest rates, a heavier interest burden, rising energy costs and the Iran conflict weighed on investor sentiment at the time.

Separately, economists at the San Francisco Federal Reserve highlighted in a letter released on Sept. 28 who is buying U.S. Treasuries. U.S. government debt rose from about 35 percent of gross domestic product in 2006 to 100 percent recently, and the sources of funding have also changed, the letter said.

The biggest change is a decline in the share of foreign investors. The foreign investor share topped 50 percent at its peak in the late 2000s but fell to about 30 percent in early 2026. Purchases by foreign governments fell sharply. They had effectively bought U.S. Treasuries almost exclusively in the 1970s, but their share fell to about 40 percent in early 2026. China influenced the trend by halving its Treasury purchases in mid-2026.

Private buying is partly filling the gap. A new category of buyer is stablecoin issuers. The San Francisco Fed pointed out that since 2023 stablecoin issuers have increased short-term Treasury holdings faster than Japan, the largest foreign holder of U.S. government debt. Their accumulated holdings over the past five years were put at about $200 billion.

Stablecoin issuers hold large amounts of short-term Treasuries because of the structure of their reserve assets. Stablecoins offer token holders 1-to-1 redemption for dollars, so issuers must build up low-risk, highly liquid assets to prepare for redemptions. The San Francisco Fed explained that the structure is similar to banks having to maintain cash-like reserves to prepare for deposit withdrawals, and that if doubts arise about convertibility it could trigger a situation comparable to a bank run.

The structure is now reflected in U.S. law. The "GENIUS Act," enacted in 2025, introduced the first federal regulation for payment stablecoins and requires issuers to back tokens 1-to-1 with qualifying assets. Qualifying assets include U.S. Treasuries. As of June 2026, the overall stablecoin market was estimated at about $270 billion.

The San Francisco Fed said the demand for Treasuries is likely to grow further. If the current trend continues, stablecoin issuers' demand for short-term Treasuries could nearly double to about $400 billion around 2030, it said. It would not be enough to cover Washington's overall borrowing needs, but it could have a meaningful impact on the short-term bond market. Research by the Bank for International Settlements also suggested that strong stablecoin demand could affect short-term bond yields.

The International Monetary Fund also classified stablecoins in a tokenisation report as a rapidly growing type of near-money backed by securities. As a result, stablecoins are establishing themselves as a funding channel linked to demand for U.S. Treasuries and the short-term money market, beyond being products within the crypto market.