eli5: if two countries both own portions of each others debt, does that debt cancel out?

Question

eli5: if two countries both own portions of each others debt, does that debt cancel out?

In: 397

Answer 1

Most national governments will not own another governments debt. Instead, it will be individual organizations who own it. That doesn’t cancel out.

It would be like if I had a debt to Visa and worked for Mastercard, and you had a debt to Mastercard and worked for Visa, those debts don’t somehow cancel out.