&gt; I wouldn&#x27;t discount this possibility entirely. As recently as the late 90&#x27;s Russia defaulted on their own debt.<p>The Russians defaulted on debt handed to them during the break-up of the USSR.  This is an important distinction in the mind of the Russians; it was not debt issued by Russia for Russia.<p>Shortly before the default on the bonds, the Russians had apparently offered a swap for Russian bonds.  Very few people took them up on it, but those who did suffered no write-down.<p>For more reading, check out Martin Gilman&#x27;s book: &quot;No Precedent, No Plan: Inside Russia&#x27;s 1998 Default&quot;.  It gives deep insight into the complexity of the Russian default.<p>Which is all a sort-of aside on your comment, I appreciate.  Many countries have gone bankrupt since WW2, at a background-rate of around 2 countries per year.  I put together a map visualizing it at <a href="https:&#x2F;&#x2F;sovinswm.appspot.com" rel="nofollow">https:&#x2F;&#x2F;sovinswm.appspot.com</a><p>The reality is that the semantics of &quot;default&quot; mean very different things in different contexts, but generally if the governing law of a debt instrument (e.g. a bond) is that of the country issuing the debt, then the country can &quot;legislate away&quot; their obligations.  This may nevertheless have knock-on effects in marketplaces, particularly via contingent or derivative instruments (e.g. credit-default swaps), and hurt the credit rating just much as if there was a technical default.<p>Very few countries have the luxury of being able to legislate away their debts, and even those that do would feel a backlash and ongoing burden remaining in the marketplace.<p>Note that being able to print ones own money and being able to change the law governing the instruments are two different things, though sometimes similar in effect.  If you control the law you can change any term of the debt agreement by legislation, for example.  If the debt is repaid in ones own currency, one can print currency to satisfy those obligations (as in quantitative easing, or seigniorage).<p>All to say: The Russian example has an interesting caveat, but it is in any case one of many recent events illustrating defaults on debts (which include Greece, Cyprus, Iceland, Argentina, Ecuador, Ukraine, and others).<p>As you can probably tell, I could probably talk about this at some length. :)