A Digital Bretton Woods – Washington Rushes to Define the Money Rails of the Future

National governments, regulators, and companies are vying to design and ultimately control the infrastructure that will carry trillions of dollars’ worth of tokenized assets, stablecoins, crypto currencies and central bank digital currencies across borders. 

These new payment systems may forever change the way businesses settle deals, workers send remittances home, and shoppers buy their favourite brands online or in stores. The scope and scale are enormous at both a micro and macro level. The geopolitical consequences are even bigger. Whoever controls the rails of the digital economy is set to maintain global economic dominance in the coming decades.

At the heart of the issue is the US dollar: dollar-linked stablecoins already account for more than 99% of the global supply. The market has already surpassed $300 billion and could swell to $2 trillion by 2028, according to data from Standard Chartered Bank and TD Economics. 

US President Donald Trump’s administration wants these digital assets to continue to be anchored to the dollar, western systems of payment and American companies. 

Historical parallels 

The original Bretton Woods system was designed to prevent the currency devaluations that sparked economic turmoil during the 1930s. Delegates from 44 countries meeting in the US state of New Hampshire agreed to create the IMF and World Bank. Importantly, they also agreed to peg currencies to the US dollar, which itself was pegged to the price of gold based on reserves.  

The arrangement made the dollar the cornerstone of international finance. Even when President Richard Nixon removed the US from the gold standard in 1971, in turn ending a fixed exchange to the US dollar, the greenback remained the world’s primary reserve asset. 

It shows how a well-crafted framework can cement monetary leadership for decades and explains why today’s contest over digital-money rails is so consequential. Stablecoins and other cryptocurrencies are moving into the mainstream through real-world use among consumers, and adoption by institutional investors. 

Control over the currency which underpins this system will determine whether the dollar maintains its reserve status forged by Bretton Woods. 

US Strategy: dollar dominance through innovation 

For now, Washington has ruled out issuing a central bank digital currency, or a “digital dollar.”  Trump has vowed to block it, while the US House of Representatives passed a bill banning the Federal Reserve from ever creating one unless explicitly authorized. The present administration and members of the Republican party believe it poses a threat to individual financial autonomy. 

Instead, the Trump administration has embraced regulated stablecoins. In July, Trump signed the GENIUS Act, the US’s first federal framework for dollar-backed tokens, requiring issuers to back coins with liquid assets and comply with anti-money laundering rules. The law paved the way for banks and payment giants such as Fiserv and Bank of America to plan their own stablecoins. Corporate retailers like Walmart and Amazon are exploring tokens to facilitate instant payments. 

Upon passage of the legislation, the White House noted in a statement that the GENIUS Act moves beyond a regulatory framework to guide US companies, emphasizing that the law will “cement the dollar’s status as the global reserve currency” and that dollar-backed stablecoins “play a crucial role in ensuring the continued global dominance of the US dollar.”

Advocates see stablecoins as a means of keeping the dollar dominant within the global financial system by making it easy to move funds across blockchains. PayPal, a US payment service provider, underscored that vision in 2023 when it launched PYUSD, a token backed by US dollar cash reserves. Representative Patrick McHenry, the former Republican chair of the House Financial Services Committee in Congress, called the launch proof that stablecoins could become “a pillar of our 21st century payments system.” 

Speaking after signing the GENIUS Act into law, Trump also took aim directly at international competitors who have traditionally opposed a dollar-led global financial order. Specifically, he cited “this little group called BRICS,” and emphasized that the legislation was “a giant step to solidify American dominance of global finance and crypto technology.”

BRICS — a coalition of Brazil, Russia, India, China, South Africa, and other invited nations — has explored digital assets as a way of bypassing financial systems tied to the dollar.

“I hit them very, very hard,” Trump said of BRICS’ efforts to challenge US currency supremacy, adding, “If they ever really form in a meaningful way, it will end very quickly,” the President said in comments made at the White House in July after signing the GENIUS Act. 

Though stablecoins are mainly used today to trade cryptocurrencies, regulators hope that clear rules will encourage their use for remittances and cross-border commerce, providing a digital complement, and potentially an alternative, to traditional transfers. The sector’s growth has been impressive with Tether, the largest issuer of stablecoins, minting approximately 181 billion tokens according to data from CoinMarketCap.
Beyond stablecoins, the White House and its allies in the US Congress have instructed the federal bureaucracy to advance regulations designed to boost innovation for the entire crypto industry. The US Department of Justice under President Trump has wound down litigation against several major crypto firms and has pledged to end the practice of “regulation by prosecution.” 

As a result, crypto firms and exchanges in the US have pursued multi-billion-dollar deals, sought listings on the New York Stock Exchange, and have seen fortunes multiply aided by an administration that has offered a full-throated endorsement of their industry. 

The growth of these companies works to further bolster the levers of financial power that the US yields on the world stage, increasing American competitiveness and innovation in the global scramble to maintain relevance and stature in the emerging digital economy. 

Allies’ Role: Europe seeks digital autonomy 

Europe has taken a different approach as it rolls out its regulatory framework for crypto assets. The European Union’s Markets in Crypto Assets (MiCA) Regulation, adopted in 2023, requires bank-like rules for crypto firms and imposes strict, uniform policies to apply across the bloc. 

European Central Bank (ECB) President Christine Lagarde warned that foreign issuers should not be allowed to exploit loopholes: stablecoins must meet robust “equivalence” regimes before operating in the EU, and only the euro is legal tender. Furthermore, the European Securities and Markets Authority has cautioned crypto companies against using their regulated status to market unlicensed products; it notes that firms must obtain a crypto asset service provider (CASP) licence from a national regulator and only then may they use it as a “passport” across the bloc.

Alongside regulations, Europe is pushing its own digital euro. Lagarde has urged lawmakers to speed up legislation to create an online version of the currency, calling it essential for Europe’s financial autonomy and a response to US stablecoin dominance. 

The ECB argues that a digital euro would allow citizens to make direct claims on the central bank, rather than relying on card networks like Visa or Mastercard. Some euro area bankers worry the project could drain deposits and cost the sector €18–30 billion, but policymakers believe it is a necessary counterweight to foreign stablecoins.

BRICS pushback: building alternatives to dollar hegemony

Beijing and its BRICS partners have a different vision again. The People’s Bank of China (PBOC) has championed a multipolar currency system and criticized “politicized” cross-border payment networks. 

The central bank is accelerating the eCNY project, a programme to create and issue a digital renminbi token, trialing it with 260 million people across 25 Chinese cities and in scenarios ranging from public transport to buying oil. AxCNH, a stablecoin linked to the offshore yuan, debuted on 17 Sept and is now licensed for use in Kazakhstan, signaling Beijing’s ambitions to integrate digital assets into its Belt and Road Initiative. 

Still, the yuan’s share of global payments remains small at about 2.9% as of June 2025, according to SWIFT’s RMB tracker, and capital controls, combined with limited private sector investment and infrastructure may limit broader adoption and innovation.

BRICS countries are also exploring cross border CBDC platforms. At the 16th BRICS Summit in 2024, members discussed the use of “BRICS Bridge”, a multiple CBDC platform designed to support cross-border payments and transactions. Seen as an alternate rail to the SWIFT payment system, BRICS Bridge may circumvent international sanctions and allow participants to maintain trade relationships out of the purview of US-led institutions. 

Russia and other BRICS members are piloting their own digital currencies, with the goal of reducing reliance on the dollar and insulating their economies from US sanctions. India, Brazil and Russia aim to launch CBDCs within two years. Despite all this activity, adoption remains uncertain. 

Geopolitics, stability and the future of money

Success in the digital economy will be difficult to quantify. However, if after some time it mirrors the current international framework, then the US dollar – and the US itself - will maintain global financial leadership.

The dollar currently accounts for about 58% of official foreign-exchange reserves, nearly 48% of international payments via the SWIFT system, and is involved in 88% of all foreign-exchange trade. Roughly 60% of global foreign-currency debt and over half of international banking claims and liabilities are denominated in dollars, while around 40–50% of world trade is invoiced in the US currency, far exceeding America’s share of global trade, according to data from the Bank for International Settlements, and the IMF.

The rise of cryptocurrencies and stablecoins may very well reinforce rather than diminish the US dollar’s dominant role as the base currency for reserves, settlements and trade invoicing. Dollar-pegged stablecoins already represent more than 99% of the market, as noted earlier, functioning as digital proxies in cross-border transactions and DeFi markets. As adoption grows, these instruments effectively extend the reach of the dollar into new payment rails, ensuring its continued central role in global finance even as technology reshapes how money moves.

A fractured world order

But where do the foundational institutions of the Bretton Woods system fit into the present situation? In an increasingly fractured economic order, the multinational organizations at the helm of international finance must have some meaningful role to play as digital assets become an increasingly significant cornerstone of the global economic system.  

Professor Amin Mohseni-Cheraghlou, Senior Lecturer of Economics at American University and a founder of the Atlantic Council’s Bretton Woods 2.0 Project, told Sandmark that global institutions such as the World Bank and IMF should be leading and setting financial standards rather than reacting to the private sector. However, he said increasing divisions between major shareholders of these institutions and the absence of a shared vision for the future of global economy and financial system among them have made that more difficult.  

“The lack of development of global standards is a bottleneck for the development of global digital assets and their interoperability,” Mohseni-Cheraghlou said, considering the interconnected nature of global trade and global finance. The same rules and protocol that govern international transactions must also be applied to digital assets to ensure resilience and uniformity against speculation, cyberattacks, and protection of privacy. 

The US, he said, remains central because of the scale of its economy, its transparency, and the trust placed in the dollar. In his view, no rival currency, whether the euro, a highly unlikely BRICS currency, or China’s yuan, comes close to fully replacing the dollar, continuing that the US can lead in the digital fronts, and global institutions must lead in the development of global standards and guardrails.

“In the long term, all countries have benefited from the strength of the US economy and the position of the dollar as a global reserve and trade currency simply because it makes trade easier by lowering transaction costs. Everybody benefits from trade, that is Economics 101, and in the digital age we need even more resilient and efficient international financial systems and rules to make trade happen,” he said. 

A slippery slope

But the dollar’s dominance isn’t guaranteed in the realm of digital assets. Innovation is new and continually evolving. If BRICS projects gain traction and euro-backed platforms succeed, cross-border trade could increasingly settle in non-dollar currencies. The dollar has lost ground recently to other currencies including the euro, the renminbi, the Swiss franc and the pound sterling.  

President Trump’s protectionist ambitions, combined with his recent attempts to exert control over the independent Federal Reserve, have made global investors more cautious about storing the greenback as a haven asset. The price of gold reached an all-time high above $4,000 in October 2025, while global demand for US Treasury bonds has declined for the past 15 years, according to researchers at the US-based Bipartisan Policy Center. 

Financial stability is also on the line. Stablecoins promise efficiency, but regulators warn of runs on reserves and links to volatile crypto markets. The EU’s ESMA has cautioned that mixing regulated and unregulated crypto products misleads consumers and creates risks. 

Not all US politicians agree that stablecoins are sure to lead to another US-led Bretton Woods order for the digital world. Elizabeth Warren, who serves on the influential Senate Banking Committee, was a vocal opponent of the GENIUS Act, arguing that it lacked guardrails to protect consumers. Warren, a Democrat who ran for US president in 2020, argued that it also stood to enrich Trump, who has directed many of his family businesses to invest heavily in digital assets.  

“Financial meltdown triggered by crypto instability isn’t some alarmist fever dream. In fact, it nearly happened just a few years ago,” Warren said in a senate speech, referring to the collapse of Sam Bankman Fried’s FTX exchange.   

She said the nature of stablecoins and cryptocurrencies pose a national security threat. “Even today, the crypto industry’s own analysts are calling stablecoins ‘the new kingpin of illicit crypto activity’ … Stablecoins account for more than 60% of all illicit crypto transactions.”  

Her opinion is shared by many western policymakers who fear that unregulated crypto transactions could help sanctioned regimes evade restrictions. On 16 Sept, the US Treasury’s Office of Foreign Assets Control (OFAC) sanctioned two Iranian financial facilitators, and over a dozen individuals and entities in Hong Kong and the UAE, for operating “shadow banking” networks that allegedly move funds from Iranian oil sales to support the country’s Revolutionary Guards and Ministry of Defense. The Treasury Department said that front companies moved nearly $100 million in cryptocurrencies to evade sanctions. 

As at Bretton Woods in 1944, the decisions taken now will reverberate for generations. The scramble to define the digital rails of the future is a test of economic innovation and political power. Whether the dollar remains the backbone of global finance or cedes ground to a multipolar mix of euros, yuan and tokenized assets depends on the choices governments, regulators and companies make today.