Harvard students and alumni have announced the launch of the “New Bretton Woods” project — an initiative focused on creating a Bitcoin-based stablecoin to combat the global debt crisis.
The project aims to build a Bitcoin (BTC) stablecoin on the Bel2 network — a Bitcoin Second-Layer Solutions — that allows users to retain control of their BTC while creating opportunities for lending, borrowing, and issuing stablecoins.
The initiative's spokesperson explained that the Bel2 infrastructure leverages Bitcoin's unparalleled security by performing Bitcoin payment transactions on the main layer and communicating with protocols on Ethereum (ETH) to mint stablecoins.
Source: Peter Brandt .
This hybrid approach preserves Bitcoin’s store-of-value properties while maximizing the liquidation of this decentralized asset. The founders of the New Bretton Woods project issued an accompanying statement when announcing the project:
“This initiative comes at a critical time when global debt is at record levels. By combining the decentralized structure of Bitcoin with the stability of a pegged coin, the project offers a financial system that mitigates the risks of traditional economies.”
Harvard Innovation Labs — a startup and business incubator hosted by the prestigious university — will also partner with students and alumni on the project.
Debt crisis in the United States
The US national debt is expected to surpass $35 trillion in July 2024. To put debt and deficit spending into perspective, it would take about 200 years for the US national debt to reach $1 trillion. At current spending levels, about $1 trillion is added to the debt every 3 months.
Economists and experts have pointed out that interest payments on the debt alone now exceed spending on the entire Department of Defense.
Chart showing annual interest payments on the national debt compared to annual defense spending. Source: James Eagle .
This massive debt is the result of years of money printing and structural deficits — a macroeconomic term that refers to the persistent inability to balance the budget independent of market cycles or economic conditions. In other words, a structural deficit persists even when the economy is operating at full capacity.
US lawmakers like Senator Cynthia Lummis have begun to take notice. In July, the Wyoming Senator introduced the Bitcoin Strategic Reserve bill in the Senate, which would buy up 5% of the total Bitcoin supply as a treasury asset.
Recently, former President Donald Trump suggested the possibility of using Bitcoin to pay off the national debt.
