Global Debt Hits Record $365 Trillion as Stablecoin Treasury Demand Grows
Key Takeaways
- •Global debt climbed to a record $365 trillion, an increase of $10 trillion in six months, with emerging-market borrowing, AI infrastructure investment, and military spending cited as the main drivers.
- •Emerging market debt rose $6.5 trillion to $110 trillion, led by China, even as the pace of accumulation slowed to less than half the $21 trillion recorded in the comparable period a year earlier.
- •The foreign share of US Treasury ownership has fallen from more than 50% in the late 2000s to about 30% by early 2026, with China halving its Treasury purchases in mid-2026.
- •Stablecoin issuers have added short-term Treasuries faster than Japan since 2023, building a five-year accumulation previously reported at roughly $200 billion and emerging as a new creditor category for Washington.
- •The San Francisco Fed expects stablecoin issuers' demand for short-term Treasury bills to nearly double to about $400 billion by 2030, a level significant enough to influence short-term bond yields according to Bank for International Settlements research.
Global debt has climbed to a record $365 trillion, and cryptocurrency is becoming an increasingly integral part of the system that finances it. Two reports published in late September—one from the Institute of International Finance (IIF) and one from the Federal Reserve Bank of San Francisco—underline both the scale of global borrowing and the shifting composition of the creditors financing it, with stablecoin issuers emerging as notable buyers of US Treasury bonds, the instruments that support those debt levels.
Global debt up $10 trillion in six months
According to the IIF's latest Global Debt Monitor, published on September 23, global debt totaled $365 trillion, an increase of $10 trillion over six months. The IIF, a global association of financial institutions, attributes the increase to three main factors: borrowing in emerging markets, investment in AI infrastructure, and military spending. Emerging market debt rose by $6.5 trillion to $110 trillion, with China the largest contributor.
The pace of accumulation actually slowed. The six-month increase was less than half the $21 trillion recorded in the same period a year earlier, which the IIF attributed to high interest rates, higher debt servicing costs, increased energy costs, and the negative impact of the Iran conflict on investor sentiment.
The lender base for US Treasuries is changing
A separate letter from economists at the Federal Reserve Bank of San Francisco—one of the 12 regional Reserve banks that make up the US central bank system—released on September 28 examines a related question: who actually lends to Washington. US government indebtedness has risen from roughly 35% of GDP in 2006 to 100%, and the composition of its creditors has changed as well.
Foreigners have traditionally been the major creditors. According to the authors, the foreign investor share has fallen from more than 50% at its peak in the late 2000s to about 30% by early 2026. Foreign governments pared back the most. Back in the 1970s, they were the exclusive purchasers of American Treasuries; by early 2026, their share had declined to just 40%. China is responsible for this decline, as its Treasury purchases were cut in half in mid-2026.
Private buyers have stepped into the gap, and the letter identifies a new category of creditor: stablecoin issuers. Since 2023, these issuers have added short-term Treasuries faster than Japan, the largest foreign holder of US government debt. The study documents the build-up over the past five years; Cryptopolitan has previously reported that increase at roughly $200 billion.
Why stablecoins hold Treasury bills
The reason is structural. Stablecoins—tokens designed to hold a fixed value against the US dollar—offer token holders a dollar-for-dollar exchange back into dollars, so issuers must hold reserves in low-risk, highly liquid assets, mostly short-term Treasury bills (US government debt maturing in a year or less), to meet redemptions. The San Francisco Fed likened the arrangement to a bank that must keep enough cash on hand to cover withdrawals, noting that questions surrounding convertibility could precipitate a run.
That structure is now mandated by US law. The GENIUS Act, enacted in 2025, established the first-ever set of federal regulations for payment stablecoins, stipulating that issuers back tokens one-for-one with eligible assets, which include Treasury bills among others, according to an August analysis by Brookings economists Nellie Liang and Brent Neiman. In effect, the rule ties expansion of the stablecoin market—which stood at about $270 billion as of June 2026—to the reserve holdings that back each token in circulation.
The San Francisco Fed expects this Treasury demand to keep growing. Assuming the present trajectory persists, issuer demand for short-term Treasury bills may almost double by 2030 to reach roughly $400 billion. That would remain well below the borrowing requirement of Washington, DC, but significant enough to exert some influence, according to the paper's authors, consistent with Bank for International Settlements research showing that stablecoin demand is strong enough to affect short-term bond yields.
The IMF, in its report on tokenization, describes stablecoins as a rapidly growing form of quasi-money backed by securities.
