United States Treasury Secretary Scott Bessent recently called for “Bretton Woods institutions,” such as the International Monetary Fund (IMF), to reorient themselves, a signal that the global monetary order could be shifting.

Speaking at the Institute of International Finance (IIF) on April 23, Bessent called on the IMF and the World Bank to correct trade imbalances and protect the value of fiat currencies against exchange rate risk.

“The Bretton Woods institutions must step back from their sprawling and unfocused agendas,” Bessent said. He added:

“The IMF’s mission is to promote international monetary cooperation, facilitate the balanced growth of international trade, encourage economic growth, and discourage harmful policies like competitive exchange rate depreciation.”

Bessent’s call for the IMF to correct trade imbalances between countries, specifically the US and China, coincides with a decline in the US dollar to three-year lows, $36 trillion in US government debt, and stiff economic competition from China.

Investor and hedge fund manager Ray Dalio argues that the world is experiencing a global macroeconomic shift that will upend the post-WWII financial order and eventually replace the US dollar as the global reserve currency, potentially with a digital form of money.

Related: Trump tariffs reignite idea that Bitcoin could outlast US dollar

The Bretton Woods Agreement

The Bretton Woods Agreement was signed in 1944 and pegged the currencies of 44 countries to the value of the US dollar, which, at that point, was pegged to the value of gold at $35 per ounce.

Eliminating complex foreign exchange risks between freely floating currencies to make global trade more efficient was the primary goal of the agreement.

In August 1971, US President Richard Nixon announced the end of the dollar’s convertibility to gold — formally ending the Bretton Woods agreement in a move that was supposed to be temporary.

“Your dollar will be worth just as much tomorrow as it does today,” Nixon incorrectly told Americans during his now-infamous address.

The IMF and the World Bank, which were spawned from the Bretton Woods agreement, continue operating in an attempt to curb the effects of free-floating fiat currencies on the foreign exchange market.

Bessent eyes stablecoins to protect the US dollar, BTC advocates have another idea

Speaking at the White House Digital Asset Summit on March 7, Bessent said stablecoins could drive international demand for US dollars and US government debt instruments.

Bessent added that the Trump administration will use stablecoins to protect the US dollar and its status as the global reserve currency.

Bitcoin maximalist Max Keiser argued against this plan, predicting that gold-backed stablecoins would outcompete dollar-pegged tokens due to the desire for low-volatility, inflation-resistant money.

In March this year, BlackRock CEO Larry Fink wrote that the $36 trillion US national debt could drive investors to Bitcoin (BTC) as market participants start to see BTC as a better store of value than the US dollar.

Bitwise executive Jeff Park voiced a similar prediction in February, focused on the effects of US President Donald Trump’s trade tariffs.

The analyst wrote that the tumult from the ongoing trade war would cause worldwide inflation, which would cause individuals to seek alternative stores of value like Bitcoin, driving its price much higher in the long term.

Magazine: Bitcoin payments are being undermined by centralized stablecoins

The Alabama Securities Commission, a financial regulator for the US state, dropped its lawsuit against crypto exchange Coinbase, which accused the company of violating securities laws by offering staking services to clients.

The regulator cited the ongoing work between the US Securities and Exchange Commission (SEC) and the crypto industry to develop clear crypto regulations as the primary reason for dropping the litigation, according to the April 23 legal filing shared by Coinbase’s chief legal officer, Paul Grewal.

The filing read:

“The SEC has announced the formation of a new task force to, among other things, provide guidance for the promulgation of rules regarding the regulation of cryptocurrency products and services.”

“Due to the foregoing, the Commission believes it would be apt to allow policymakers time to consider regulatory constructs,” the filing continued.

The Alabama Securities Commission filed its lawsuit against Coinbase in June 2023, alongside state regulators from California, Illinois, Kentucky, Maryland, New Jersey, South Carolina, Vermont, Washington, and Wisconsin.

The Commission’s dropped lawsuit reflects the positive regulatory shift toward cryptocurrencies in the United States as reform at the federal level matriculates into state-level regulatory policy.

Related: Oregon targets Coinbase after SEC drops its federal lawsuit

US states drop Coinbase lawsuit but half still holding out

Five of the 10 states that filed the litigation against Coinbase for its staking services have dropped their lawsuits.

On March 13, Vermont’s Department of Financial Regulation became the first of the 10 state regulators to drop the staking lawsuit against Coinbase.

South Carolina’s securities watchdog was the next to drop the 2023 litigation against Coinbase, dismissing the lawsuit on March 28.

Grewal announced that Kentucky’s Department of Financial Institutions followed Vermont and South Carolina’s lead on April 1 by also dismissing its Coinbase lawsuit.

Despite the domino effect of states rescinding litigation against the crypto exchange, the Coinbase chief legal officer said that more work needs to be done.

“Five holdouts are still electing to waste taxpayer resources on lawsuits, and four of those have banned staking with Coinbase, depriving consumers of the right to earn on their platform of choice,” Grewal wrote in an April 23 X post.

Magazine: SEC’s U-turn on crypto leaves key questions unanswered

Officials with the US Securities and Exchange Commission’s (SEC) crypto task force met with the El Salvador National Commission on Digital Assets (CNAD) to discuss regulation and a proposed cross-border sandbox.

In an April 22 memo, the SEC’s crypto task force reported meeting with officials from El Salvador, Perkin Law Firm, and former Goldman Sachs partner Heather Shemilt as part of the commission’s outreach to the industry. The representatives discussed US-El Salvador cross-border collaboration on crypto regulation at a time when the relationship between the two countries was in the national spotlight over immigration and US deportations to an El Salvador prison.

According to the meeting notes, El Salvador’s national commission agreed to collaborate with the SEC to establish a sandbox pilot program, capped at $10,000 for each scenario. The program proposed allowing brokers licensed in the US to obtain a digital asset license in El Salvador and issue “non-securities” tokens in collaboration with a local company.

Many in the crypto industry see Salvadoran President Nayib Bukele as behind the country’s efforts to adopt cryptocurrency since he announced legislation to recognize Bitcoin (BTC) as legal tender in 2021. Bukele met with US President Donald Trump on April 14, discussing details of a $6 million deal in which the Trump administration has been sending immigrants, whose legal status to be in the US is unclear, to prisons in El Salvador. Some of these deportations violated orders from federal judges.

Related: Bitcoin takes back seat as Trump, Bukele focus on trade and immigration

New SEC chair sworn in

It’s unclear if the Trump administration may intend to deepen ties to El Salvador through additional regulatory partnerships or stepping up deportations in its existing deal. Cointelegraph reached out to SEC Commissioner Hester Peirce, who heads the crypto task force, for comment, but did not receive a response at the time of publication.

The meeting report came roughly a day after the SEC announced that Paul Atkins had been sworn in as the commission’s new chair, following Gary Gensler and acting chair Mark Uyeda. During his swearing-in ceremony, Atkins said his top priority would be to “provide a firm regulatory foundation for digital assets.” 

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