Harvard students started the ‘New Bretton Woods Project’ to solve the debt crisis
Harvard students and alumni have announced the launch of the “New Bretton Woods Project” – an initiative focused on creating Bitcoin-backed stablecoins to combat the global debt crisis.
The project aims to build a Bitcoin (BTC) stablecoin on the Bel2 network – a Bitcoin Layer-2 solution – to allow users to control their BTC and at the same time create opportunities to lend, borrow and issue stablecoins.
The Bel2 infrastructure serves Bitcoin's unparalleled security by executing Bitcoin settlements on the underlying layer and connecting to the protocols on Ethereum (ETH), the licensee's spokesperson explained.
Source: Peter Brandt
This hybrid approach preserves Bitcoin's store of value properties while maximizing decentralized asset liquidity. The founders of the New Bretton Woods project released the following statement with the announcement of the project:
“This initiative comes at a critical time when global debt is at its peak. By combining the decentralized structure of Bitcoin with the stability of an established currency, the project offers a financial system that mitigates the risks of traditional economies.”
Harvard Innovation Labs – an entrepreneurship and startup incubator hosted by the prestigious university – will also collaborate with its students and alumni on the project.
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The debt crisis in the United States
The national debt in the United States will pass the $35 trillion mark by July 2024. To take into account the level of debt and the size of the deficit, it took approximately 200 years for the US national debt to reach $1 trillion. At current spending rates, roughly $1 trillion is added to the debt every 3 months.
Economists and researchers say interest payments on the debt now cost the entire Defense Department.
A chart showing annual interest payments on the national debt compared to annual defense spending. Source: James Eagle
This rampant debt was caused by years of money printing and structural deficits – the macroeconomic term for the inability to balance the budget independent of market cycles or economic conditions. In other words, structural deficits persist even when the economy is operating at full capacity.
US lawmakers like Senator Cynthia Lammis are starting to look into the situation. In July, a Wyoming senator introduced the Bitcoin Strategic Reserve Bill in the Senate, to acquire 5% of the total supply of Bitcoin as a treasury asset.
Recently, former President Donald Trump floated the possibility of using Bitcoin to pay off the national debt.
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