Vance sidesteps Bitcoin, XRP debt plan as U.S. debt tops $40T

Vice President JD Vance declined to back Bitcoin and XRP as direct mechanisms for reducing the U.S. national debt, which surpassed $40 trillion, pointing instead to Treasury Secretary Scott Bessent's growth-focused plan.

"Bessent has a very discreet plan, of course, supported by the president of the United States, to get the United States to a point where our economy is growing faster than our debt," Vance said during a Newsmax interview with host Carl Higbie. "And if you look, we are on track."

Vance said nearly $19 trillion in foreign investment is expected to enter the U.S. over the next decade, which could expand the tax base and support the Treasury market. He also referenced Trump's interest in creating a U.S. sovereign wealth fund, noting that while Bitcoin could become part of a wider asset mix, the fund would focus more broadly on domestic equities, energy, and other strategic assets.

The comments come as the national debt crossed $40.01 trillion for the first time, according to Treasury Department data. Net interest costs exceeded $1 trillion in fiscal year 2024, surpassing defense and Medicare spending, while the debt-to-GDP ratio stands at roughly 120 percent. The debt has more than doubled since January 2017, when it stood at $19.9 trillion, and surged past $27 trillion by 2020 as the government borrowed heavily for pandemic relief.

Sovereign Wealth Fund Could Still Include Bitcoin

Trump addressed the reserve question at a White House gathering, saying a Bitcoin reserve "has been talked about" and that it had "taken a lot of pressure off the dollar." However, he deferred final structural decisions to SEC Chairman Paul Atkins and CFTC Chairman Michael Selig.

The administration's approach makes crypto look more like a supporting asset than a direct tool for paying down the debt. The U.S. has run a budget deficit every year since 2001, and the Congressional Budget Office projects deficits will average around $2 trillion annually over the next decade, pushing the debt even higher. Higher debt levels can lead to increased borrowing costs for the government, which in turn can crowd out private investment and slow economic growth.

CLARITY Act Takes Priority Over Crypto Reserve

The administration's immediate crypto focus appears to be regulation rather than reserve accumulation. Vance has backed the CLARITY Act, calling it "very important" for the U.S. technology sector. The bill aims to establish clearer rules for digital assets and blockchain projects, potentially giving companies more certainty to build in the U.S.

The regulatory push comes as the U.S. debt trajectory continues to accelerate — the government is adding roughly $1 trillion to the national debt every 150 days, according to the U.S. Debt Clock. For crypto markets, the combination of a $40 trillion debt milestone and recurring debt-ceiling politics raises macro risk, potentially pressuring interest rates and the dollar while driving volatility across digital asset markets. If investors lose confidence in the U.S. government's ability to manage its finances, they may demand higher yields on Treasury bonds, which could ripple through the global financial system and push more capital toward alternative assets.

This article is for informational purposes only and does not constitute investment advice.