Kerby Anderson

Treasury Secretary Scott Bessent has been talking about a financial realignment of the global financial system, which he calls Bretton Woods 2.0, but should probably be described as Bretton Woods 3.0. Here are the three eras of the U.S. economy.

Bretton Woods is the agreement established in 1944. The U.S. dollar became the reserve currency, and the agreement also created the International Monetary Fund and the World Bank. The dollar was pegged to gold, and every other currency was pegged to the dollar. This lasted until 1971, when Richard Nixon closed the gold window.

Bretton Woods 2.0 was never officially negotiated but emerged because of an agreement with Saudi Arabia to price oil in dollars and recycle the proceeds into U.S. treasuries. This was the era of the “petrol dollar” and lasted for about 50 years. But now we see many countries selling oil in Chinese yuan and other currencies. Bretton Woods 1.0 was the dollar on gold. Bretton Woods 2.0 was the dollar on oil.

Bretton Woods 3.0 is the dollar on stable coins. People in other countries with unstable currencies would like to have their finances in dollars rather than their local fiat currency. Stable coins are backed by U.S. treasuries, which helps the government fund its national debt.

With that as background perhaps you can now see why Congress already passed the GENIUS Act that regulates stable coins, and why the Senate now seems poised to pass the CLARITY Act, which provides a regulatory framework for stable coins and other digital assets.

I believe we are moving into a new era of finance, which this administration believes will help us continue to fund the growing national debt.