Washington’s Crypto Pivot Isn’t About Silicon Valley. It’s About Treasuries

Much ado has been made about U.S. President Donald Trump’s open-armed embrace of crypto.

One theory is that the White House’s friendliness toward digital assets is a favor to Silicon Valley donors, a gesture to innovation-friendly constituencies. Another is that it reflects an administrative belief in the efficiency gains that blockchain can bring to payments.

Both explanations may hold some truth. But they miss a more pressing, and under-analyzed, reason: America has a debt problem. And the challenge isn’t just how much the U.S. owes ($37 trillion and counting), either — it’s who will keep buying that debt.

Foreign buyers of U.S. Treasuries — long the dependable stalwarts of American borrowing — are pulling back. Among other examples, China’s holdings dropped to their lowest since 2009