Definition ∞ Sovereign Debt refers to the money owed by a national government to its creditors, including individuals, corporations, or other governments. It represents financial obligations issued by a sovereign state to finance its expenditures or manage its fiscal policy. This debt can be denominated in domestic or foreign currency. It is a fundamental component of national economies.
Context ∞ Sovereign debt is a traditional financial concept that is beginning to intersect with digital assets, particularly with the rise of central bank digital currencies. News occasionally discusses the potential for tokenizing sovereign debt or using blockchain technology for more efficient issuance and management of government bonds. The debate involves the implications for monetary policy, financial stability, and international capital markets.
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