The US Treasury said it would not mint a platinum coin to avoid an increase in the nation’s borrowing limit, ending speculation that the Obama administration would exploit an arcane loophole to avert a possible default.

One day after Democratic leaders in the Senate urged Barack Obama, the US president, to sidestep Congress if necessary and use any legal mechanism to increase the debt limit, the Treasury released a rare Saturday statement explicitly ruling out creating a $1tn coin to avoid a possible crisis.

“Neither the Treasury department nor the Federal Reserve believes that the law can or should be used to facilitate the production of platinum coins for the purpose of avoiding an increase in the debt limit,” a spokesman for the Treasury said.