A Bretton Woods for the digital-currency era? Will we see more global coordination on digital assets?
Is the global economy steering toward a Bretton Woods for the digital-currency age?
Sunday marks the 50th anniversary of what has been described as the dropping of a “monetary bombshell” on the world financial system, when President Richard Nixon announced that the U.S. dollar would no longer be pegged to gold GC00, -0.22%, effectively yanking America out of an international currency regime established by the Bretton Woods agreement.
The international monetary system was forged in the 1940s amid the fight against fascism and global economic instability. The primary aim of the Bretton Woods agreement was to create a currency system less rigid than the gold standard while providing financial stability. As part of the effort, the conference laid the foundations for the International Monetary Fund and the World Bank.
Now, five decades later, the monetary regime in the wake of the dissolution of the Bretton Woods system on Aug. 15, 1971 isn’t that much different. The U.S. dollar still serves as the reserve currency of the world, but in an era of bitcoin BTCUSD, 1.60% and blockchain-backed currencies, the rise of stablecoins pegged to fiat currencies, and central bank digital currencies, or CBDCs, a new global regime is emerging.
