Harvard students and alumni have just announced the “New Bretton Woods Project”, an initiative to use Bitcoin to create a stablecoin on the Bel2 layer-2 platform to solve the problem of record-high global debt.
On September 19, a group of Harvard students and alumni launched the “New Bretton Woods Project,” using Bitcoin to create a stablecoin to address the worsening global debt crisis.
The project focuses on building Bitcoin stablecoins on the Bel2 network, a Bitcoin layer-2 solution that allows users to control their Bitcoin (BTC) while supporting lending, borrowing, and issuing stablecoins.
Source: X
According to the development team, the Bel2 infrastructure leverages Bitcoin’s high security by executing Bitcoin transactions on the main layer and interacting with Ethereum protocols to issue stablecoins. This hybrid approach maintains Bitcoin’s store-of-value properties while optimizing the digital asset’s liquidity.
Solutions to the global debt problem
The founders of the “New Bretton Woods Project” emphasize that the birth of this project comes at a time when global debt has reached record levels, especially the US national debt, which is expected to surpass $35 trillion by July 2024. This situation is the result of years of money printing and structural deficits, leading to the fact that the interest payments on the debt alone exceed the spending of the entire Department of Defense.
The chart shows annual interest payments on the national debt compared to annual defense spending. Source: James Eagle
The project team believes that combining the decentralized structure of Bitcoin with the stability of a pegged currency will create a new financial system that reduces the risks of traditional economies facing debt burdens. Harvard Innovation Labs, the startup and business support center run by Harvard University, will also collaborate with a group of students and alumni on the project.
Notably, in the context of rising national debt, US lawmakers are also looking for solutions. Senator Cynthia Lummis has proposed the Bitcoin Strategic Reserve Act, which would buy 5% of the total supply of Bitcoin as Treasury assets. Former President Donald Trump has also mentioned the possibility of using Bitcoin to pay off the national debt.
