The Digital Economy Research Initiative, spearheaded by Harvard students and alumni, announced the launch of the “New Bretton Woods Project” (NBW). This blockchain-based initiative seeks to address the growing global debt crisis by providing innovative, technology-driven solutions.
“Our goal is to create a ‘New Bretton Woods’ system anchored in Bitcoin, bringing stability through the utility of a stablecoin. This stablecoin allows users to bypass Bitcoin’s price volatility while retaining the potential for long-term gain, making the product practical for daily use,” said Jacob, Lead Member of NBW at Harvard University, in a written statement.
Central to the project is the creation of a native Bitcoin stablecoin that utilizes decentralized finance (DeFi) principles. By leveraging the BeL2 infrastructure, NBW aspires to transform global financial systems, offering innovative solutions for debt management and fostering financial stability among nations.
BeL2 serves as a Layer 2 solution for Bitcoin that enables DeFi while maintaining the security of the main blockchain. It allows users to lend, borrow, and trade directly without the need for intermediaries, thus promoting financial autonomy. At the same time, BeL2 upholds Bitcoin’s fundamental principles of decentralization.
NBW repositions Bitcoin not merely as a store of value but as the cornerstone of the DeFi system. By utilizing BeL2, the project facilitates the creation of smart contracts for Bitcoin-backed stablecoins, enabling users to participate in DeFi while upholding Bitcoin’s essential principles of decentralization and security.
The Bitcoin stablecoin will be fully backed by Bitcoin, allowing users to enjoy the stability associated with fiat currencies without needing to liquidate their Bitcoin assets. This approach balances the algorithmic security provided by Bitcoin miners with the potential for long-term growth.
The BeL2 framework supports various DeFi applications while keeping Bitcoin securely anchored on its main network. Bitcoin can be used as collateral for Layer 2 applications, such as decentralized exchanges, loans, and stablecoin issuance. The NBW team ensures that all Bitcoin settlements take place on the main network to maximize security. Rather than transferring assets between blockchains, messages are communicated to Ethereum-compatible networks to facilitate stablecoin issuance, thereby integrating technologies and fostering a resilient, decentralized economy.
New Bretton Woods Project Aims To Tackle Global Debt Crisis With Its Solution
“This initiative comes at a crucial time as global debt reaches record levels. By combining Bitcoin’s decentralized structure with the stability of a pegged currency, the project offers a financial system that mitigates the risks of traditional economies, highlighting the real-world benefits of financial security and sovereignty,” said Jacob.
“Our stablecoin isn’t just another digital currency; it’s a tool for global financial stability. We believe that offering a decentralized and stable currency helps individuals and communities navigate the growing challenges posed by the global debt crisis,” he emphasized.
NBW will soon be incubated at Harvard Innovation Labs, where it aims to connect traditional finance with decentralized systems. The team is dedicated to promoting financial inclusivity and enhancing economic stability.
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