U.S. federal debt has grown 40-fold over 45 years, climbing from $1 trillion in 1981 to more than $40 trillion. In a November 3 video interview with Bitcoin Magazine, Andrew Hohns, founder and CEO of Battery Finance, explains why he does not expect tax hikes or spending cuts to solve the problem — and how a strategic Bitcoin reserve could help defease the national debt. Defeasance is a term of art in finance for setting aside assets whose income and appreciation can satisfy an obligation without new borrowing. The fiscal backdrop Hohns is addressing is measurable: net interest on the federal debt has grown past annual defense spending to rank among the government's largest outlays, and Washington took a first step toward a reserve in March 2025, when an executive order created a Strategic Bitcoin Reserve capitalized with bitcoin forfeited to the federal government and directed officials to explore budget-neutral ways to add to it.

Hohns also makes the case for the U.S. Treasury to pilot BitBonds, and discusses why the bonds have yet to come to market. As publicly proposed by Hohns and Bitcoin Policy Institute executive director Matthew Pines, a BitBond would pair a conventional Treasury structure — a 10-year term and a 1% coupon — with roughly 10% of the principal in bitcoin exposure, an arrangement floated in 2025 as a way for the Treasury to borrow more cheaply while accumulating reserve assets. On the credit side, the conversation arrives amid a strained property-market backdrop, in which a large volume of real estate loans written during the low-rate era is maturing into today's higher borrowing costs — the refinancing wall referenced in the chapter list below — and bitcoin-collateralized lending has emerged as an alternative route to liquidity for borrowers.

The full conversation is available on YouTube. Topics covered include:

• 00:00 — Andrew Hohns on Bitcoin and the Midterms
• 00:47 — Bond Market Volatility and America's Fiscal Outlook
• 01:22 — 40x Federal Debt Growth in 45 Years
• 02:55 — A Strategic Bitcoin Reserve to Defease the Debt
• 03:20 — Why BitBonds Haven't Come to Market Yet
• 05:12 — Higher Borrowing Costs and the Digital Credit Boom
• 06:15 — Battery Finance's Bitcoin-Backed Real Estate Loans
• 07:03 — The $2 Trillion Real Estate Refinancing Wall
• 08:52 — How Battery's Loans Avoid Margin Calls
• 11:03 — Which Property Types Are Under Pressure
• 13:34 — The Future of Bitcoin and Real Estate Financing
• 16:25 — Digital Credit and Institutional Bitcoin Adoption

DISCLAIMER: The views and opinions expressed in this show are those of the participants and do not necessarily reflect the official policy or position of BTC Inc., Bitcoin Magazine, or any affiliated entities. This content is provided for informational and educational purposes only and should not be construed as investment, legal, tax, or accounting advice. Nothing contained in this show constitutes a solicitation, recommendation, endorsement, or offer to buy or sell any securities or financial instruments. Viewers should consult their own advisors before making financial or business decisions.

This article, written by Patrick Green, first appeared on Bitcoin Magazine.