The former US House of Representatives Speaker, Kevin McCarthy, is warning that the national debt is nearing a crisis situation.

In a new interview on CNBC’s Squawk Box, the Republican politician says that the next US president will have to start reducing government spending as borrowing continues to soar, threatening the dollar’s global dominance.

The US debt just ballooned by more than $519 billion between July 3rd and July 28th, reaching a total of more than $36.8 trillion.

“Your real question is, how do you keep the dollar the world currency? I think the more that we go in and sanction we’re pushing countries to learn to go around the dollar. I think President Trump has done a very smart move against the BRICS, what they were trying to do. But it all comes down to debt. That’s why debt is our greatest threat to America, and you cannot avoid it any longer.”

McCarthy says that if the next president doesn’t materially address the debt, then significant safety net programs like Social Security may face deep cuts.

“The next President is going to have the debt crisis… and the challenge is, if you look in the past, the Democrats had the ‘Blue Dog.’ Those were Democrats who cared about debt. They’re no longer there. No one in Congress has been elected saying they’re going to balance the budget. The country has to be educated on this, and Congress is going to have to act, because Social Security in the next administration is either going to take a 24% cut or [it will] do something about it.”

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The Ethereum Foundation (EF) has quietly taken a tactical step into DeFi by borrowing $2 million in GHO stablecoins using wrapped ETH (wETH) as collateral on the Aave protocol.

Marc Zeller, founder of the Aavechan Initiative, shared the development on May 29, noting that the Foundation’s use of GHO aligns with Aave’s core value proposition, enabling ETH holders to unlock liquidity without exiting their positions.

He said:

“They didn’t have to sell a single ETH to fund their objectives. Aave is designed for holders with conviction.”

Stani Kulechov, founder of Aave Protocol, echoed this sentiment. He highlighted that the EF is supplying ETH and borrowing on Aave, calling it a demonstration of DeFi’s complete utility cycle.

The Ethereum Foundation has not officially commented on the transaction as of press time.

However, the crypto community has broadly supported the strategy, viewing it as a prudent approach to treasury management and long-term sustainability.

Maksym Blazhkun, the co-founder of WeNode, said:

“Borrowing without selling — that’s DeFi conviction in action. Ethereum Foundation playing it smart with Aave.”

According to DeFillama data, Aave is Ethereum’s dominant DeFi lending protocol, with over $43 billion in total value locked (TVL). GHO is Aave’s native overcollateralized stablecoin and currently has a circulating supply of $249 million.

According to blockchain analytics firm Token Terminal, active lending and GHO issuance are critical metrics that correlate directly with Aave DAO’s ability to generate revenue.

Ethereum Foundation’s revamp

Meanwhile, this loan move follows EF’s recent efforts to reshape its treasury strategy after extended community complaints.

Earlier this year, the Foundation deployed 50,000 ETH across multiple DeFi platforms. That included a February deposit of 30,800 ETH into Aave, split between its core market and Aave Prime. Additional allocations included 10,000 ETH to MakerDAO’s Spark and 4,200 ETH to Compound.

The borrowing reflects a strategic shift away from liquidating ETH to finance operations. Instead, EF is now tapping into DeFi lending to maintain its holdings while generating yield.

This approach also distances the Foundation from the criticism it faced in January, when it sold 300 ETH worth nearly $1 million.

Mentioned in this article

April 15th, 2025 – Hong Kong, Hong Kong

TermMax is excited to announce the official mainnet launch on Ethereum and Arbitrum, going live on April 15, 2024.

TermMax is set to redefine decentralized finance (DeFi) by offering the most efficient leverage solution – fixed-rates borrowing and lending with a single click. The extended features include one-click looping positioning, range orders, and customizable pricing curves. Think of TermMax as Uniswap V3 for borrowing and lending—a platform that combines the flexibility of Uniswap V3 with a V4 upgrade in the near future.

How TermMax Solves Key DeFi Challenges

TermMax is designed to address key challenges faced by DeFi users, streamlining the borrowing, lending, and leveraging experience. Here’s how it solves these issues:

• Complex Leveraged Yield Strategies – TermMax offers one-click looping, eliminating multi-step transactions across protocols.
• Uncertain Floating Rates – Fixed-rate borrowing with set maturity dates for predictable costs.
• Limited Pricing Flexibility – Customizable range orders let users set their own borrowing and lending rates and define their own slippage.
• Collateral Restrictions – A flexible liquidation mechanism (including physical delivery of collaterals) supports RWAs and low-liquidity assets while protecting lenders.
• Inefficient Market Making – The market-making console allows market makers and curators to quote lend-only, borrow-only, or two-way prices.

TermMax’s Vision: Building the Future of Fixed-Income Markets

The global financial markets exceed $100 trillion in fixed income and over $600 trillion in rate derivatives, yet DeFi’s fixed-rate market remains under $20 billion. This highlights an immense growth opportunity, and TermMax is at the forefront of this expansion. By creating an entire credit market for each token pair, TermMax aims to replicate real-world fixed-income markets in the crypto space.

Join the Revolution: Mainnet is Live

TermMax invites the DeFi community to experience the future of borrowing and lending on its mainnet. With its innovative solutions and user-friendly platform, TermMax is set to transform the DeFi landscape, making leveraged yield strategies more accessible and profitable for all. An exciting incentive program for early adopters is on the way.

Additionally, they’re introducing TSI (Term Structure Institutional), a KYC-compliant, institution-only fixed-rate borrowing and lending Electronic Communication Network (ECN). Built on Fireblocks’ MPC wallet infrastructure, TSI provides a seamless and secure solution for institutional participants.

For more information, users can visit TermMax’s website and join the conversation on X, Telegram, or Discord.

Contact

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