speaking to Bloomberg on Thursday, Paulson said the plan needs to be “targeted and short-term” and ready before a crisis hits
Crypto News
Former Treasury Secretary Henry Paulson has called on U.S. authorities to draft an emergency contingency plan for a potential collapse in demand for U.S. Treasurys. Speaking to Bloomberg on Thursday, Paulson said the plan needs to be “targeted and short-term” and ready before a crisis hits. “When we hit it, it will be vicious, so we have to prepare for that eventuality,” he said.
U.S. national debt currently exceeds $39 trillion, and economists have long warned of a potential “doom loop” in which rising debt levels push investors to demand higher yields on government bonds. Higher yields increase interest payments on existing debt, widening the fiscal deficit further. The 10-year Treasury note currently yields 4.3%.
A Treasury market disruption would create a split impact on crypto. A crisis could push investors toward alternative stores of value like BTC or gold, particularly if Fed intervention to monetize debt fuels inflation fears and erodes confidence in the dollar. At the same time, Tether, the world’s largest stablecoin issuer, holds 63% of its reserves in U.S. Treasury bills and 10% in overnight reverse repurchase agreements, according to its transparency report.
Separately, the U.S. Treasury conducted its largest single debt buyback on Thursday, accepting $15 billion in older securities maturing between 2026 and 2028. Such operations retire less-liquid bonds and return cash to holders who may redeploy it elsewhere in financial markets, improving overall TreasuryMarket liquidity.
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