America's rising debt is driving the dollar toward a crisis, according to Yu Yongding, a former adviser to China's central bank.

"Such a huge amount of debt is terrible," Yu said in a speech in Singapore Sept. 28. "The situation will be worsening day by day. I think we are one step nearer to a U.S. dollar crisis."

Yu added that China is worried about its international investments, including American Treasury bills and the U.S. Dollar, according to a report by Bloomberg News.

"China should reduce its holdings of U.S. dollar assets to diversify risks of "sharp depreciation," Yu said back in July.

"The nation should convert some holdings in U.S. dollars into assets denominated in other currencies, commodities and direct investments overseas," he wrote in a commentary in the China Securities Journal.

The U.S. will record a $1.3 trillion budget deficit for the fiscal year ending Sept. 30, the Congressional Budget Office said Aug. 19.

The U.S. national debt is expected to reach as high as $20 trillion in the next decade or so.