Past and Forward: Bretton Woods | 1944 and 2016
The July 1944 Bretton Woods Conference, formally known as the United Nations Monetary and Financial Conference, was a meeting of worldwide importance. Over 700 delegates from all 44 allied countries gathered at Mount Washington Hotel, situated in Bretton Woods, New Hampshire to discuss plans for a new global monetary system, with the intent of stabilizing growth, trade, and peace in the post World War II era.
John Maynard Keynes, a British economist of international acclaim was the key headliner at this forum along with the lesser known Harry Dexter White who at the time was the U.S. Treasury Secretary. While both envisioned a common global currency for the world, their intentions differed significantly.
Keynes, who played a major role in navigating Britain through a depression and expressed concern about the UK’s place in the world economy, advocated for a currency that America would not be able to control. Bancor was the proposed name for this currency that could be transacted internationally, with no set borders. The intent was to use it for international trade, all driven by an International Clearing Union or “central bank.” In many ways, Bancor resembled what we know today as Bitcoin, in terms of its intended worldwide presence and boundaryless qualities.
White, on the other hand, who led the conference, believed that America should stake its position as the world economy leader. He supported the recognition of the U.S. dollar as the global, universal currency, a feat that he helped achieve and still exists to this day.
The Bretton Woods agreements were codified, after legislative ratification by member governments. Moreover the International Bank for Reconstruction and Development (IBRD) and the International Monetary Fund (IMF) were established as major conduits for this new system Under these agreements, every country in the world was therefore required to peg their currency to the U.S. dollar as well as store a certain amount of gold in their vaults as reserve currency. The end result of all of this is the U.S. dollar’s prevailing distinction as the supreme, unrivaled currency for global trade.
Bretton Woods 2016
Fast-forward to July of 2016. That’s when regulators, legislators and entrepreneurs gathered at Bretton Woods, the site of the groundbreaking 1944 global economic accord, with the goal of formalizing a set of guiding principles for the fast emerging blockchain industry. It, too, arguably had major implications for the future of global economy. Spearheaded by the consumer advocacy group Consumers’ Research, this meeting culminated with key tenets to be featured in a final white paper, scheduled for release at the Money2020 payments industry conference in October.
Here are some concluding comments from a couple of the attendees:
“I found this to be a gathering of incredibly intelligent and passionate individuals with deep and wide expertise and a selfless dedication to protecting consumers. Everyone seemed committed to the goal of equalizing the playing field so that all individuals can participate in the modern economy. It was humbling to see so many participant committed to changing the world, while actually has the mindset, skills, dedication, and energy to do so.
I meet what I hope are impactful, long term relationships that positively influence how I conduct myself personally and professionally. There was this feeling of awe around all of the tools that were presented to improve how how we view standards, guidelines, best practices, and tools for enabling safe and secure digital commerce. It was great to see these resources available to everyone that wanted to participate.”
“This was my second year attending the event. The event is basically a workshop where people with different interests and perspectives come together in an intimate setting and flesh out different predictions and concerns regarding bitcoin, blockchain tech, smart contracts, etc. Most discussions are focused on consumer protection and that makes sense considering the host is Consumers’ Research.
Last year’s event resulted in a white paper being published. In the mix are regulators, fin-tech lawyers, reps from industry advocate groups, coders, etc. all in one room hashing out the potential for this technology. This year there were also two US congressional aids in attendance.
With respect to the future development question, the main benefit as I see it is an ongoing channel of communication between the various camps that were represented in the group. Cross pollination between interest groups, if you will.
One take away I had this year came from some of the panels that addressed blockchain and smart contracts from a legal perspective. The analogy I could think of was blockchain as a newly discovered, magical species, (purple polka dotted unicorn) and the lawyers in the room were going through great pains to try to fit it into the taxonomy of the current legal framework. One even wanted to create a global registry of code that all programmers had to submit their work to so that they could no longer work anonymously.
Another interesting idea that came up was the issue of smart contracts and whether the code becomes the law. In western society, writing one’s signature on a contract is basically a sacrosanct act. With smart contracts, instead of a written signature, there is a much more explicit agreement created when a user sends a crypto asset, such as ether, to an address on blockchain.”
“We brought together some of the best thinkers in the bitcoin space who had very different perspectives on the important issue of consumer protection in the Bitcoin community. We walked away with a much better understanding of how to protect consumers that took into account the various perspectives: legal, technical, regulatory, and cultural. We’re working on a product now that synthesizes these viewpoints as well as takes into account the current state and needs of the industry, and we’ll release it this October at Money 2020.
It was really remarkable how much thought people could put into a subject when they had so few distractions over three days. Retreating to New Hampshire, like the original Bretton Woods attendees, allowed us to really dig deep into the knowledge and experience toolboxes that everyone brought with them. The industry is still young, but the people who are driving it are some of the brightest and most dedicated people I’ve ever met and they’re working on incredible projects.”
Michael Scott is a journalist specializing in emerging digital economy trends and is CoinStructive’s resident blogger.