On-chain Bretton Woods System: Stablecoins, US Treasuries, and the New Structure of the Dollar in the 21st Century

Author: Macro Hedge Fund Ping Peng

In the new wave of digital finance, stablecoins are not disruptors of the old system, but rather a "digital relay station of the Bretton Woods system" ------ carrying the credit of the dollar, anchoring U.S. Treasury assets, and reshaping the global settlement order.

I. Historical Reflection: Three Structural Leaps of Dollar Hegemony

The new phase after 2020 is a reconstruction process of the digitalization, programmability, and fragmentation of the dollar's credit base, with stablecoins being the key connective tissue in this reconstruction.

II. The Essence of Stablecoins: The "Dollar-Treasury" Anchoring Mechanism on the Chain

Stablecoins, especially those pegged to the dollar like USDC, FDUSD, and PYUSD, have an issuance mechanism of "on-chain dollar certificates + Treasury or cash reserves", forming a simplified version of the "Bretton mechanism":

This indicates that: The stablecoin system effectively reconstructs a "digital version of the Bretton Woods framework", with the anchor shifting from gold to U.S. Treasuries, and from national settlement to on-chain consensus.

III. The Role of U.S. Treasuries: The "New Reserve Gold" Behind Stablecoins

In the reserve structure of mainstream stablecoins, U.S. Treasuries, especially short-term T-Bills (1-3 month Treasury bills), account for the highest proportion:

• USDC: Over 90% of reserves are allocated to short-term Treasuries + cash;

• FDUSD: 100% is cash + T-Bills;

• Tether is also gradually increasing the weight of Treasuries while reducing commercial paper.

▶ Why have U.S. Treasuries become the "hard currency" of on-chain finance?

1. Extremely liquid, suitable for handling large on-chain redemptions;

2. Stable returns, providing issuers with interest margin income;

3. Backed by U.S. sovereign credit, enhancing market confidence;

4. Regulatory friendly, serving as compliant reserve assets.

From this perspective, stablecoins are "new Bretton tokens with T-Bills as gold", embedded with the credit system of the U.S. Treasury.

IV. Stablecoins = An Extension of Dollar Sovereignty, Not a Diminution

Although it may seem that stablecoins, issued by private entities, weaken central banks' control over the dollar, in essence:

• Each USDC issued must correspond to 1 dollar in Treasuries/cash;

• Each on-chain transaction is priced in "dollar units";

• Each stablecoin's global circulation expands the usage radius of the dollar.

This means that the U.S. no longer needs SWIFT or military projection to "airdrop" dollars into global wallets, representing a new paradigm of outsourced monetary sovereignty.

Therefore, we say:

Stablecoins are the "unofficial contractors" of U.S. monetary hegemony
------ They do not replace the dollar, but push the dollar onto the chain, into the global arena, and into the "unbanked zone".

V. The Emergence of Bretton 3.0: Digital Dollar + On-Chain Treasuries + Programmable Finance

In this framework, the global financial system will evolve into the following model:

This implies that: The future Bretton Woods system will no longer occur at the Bretton Woods conference table, but will be negotiated and reached through smart contract code, on-chain asset pools, and API interfaces.

VI. Risks and Uncertainties: How Far Can This System Go?

VII. Conclusion: Stablecoins Are Not the End, But a "Midfield Supply Station" for U.S. Global Governance

Stablecoins may seem like private innovation, but they are actually becoming a "de facto bridge" for the U.S. government's digital currency strategy:

• They connect old finance (U.S. Treasuries) with new finance (DeFi);

• They extend U.S. financial sovereignty to the smart contract layer;

• They ensure that the dollar maintains its dominant position in the digital transformation.

Just as the Bretton Woods system established dollar credit through gold anchoring, today's stablecoins are attempting to rewrite the monetary governance structure with "on-chain T-Bills + dollar settlement consensus".

Stablecoins are not a revolution, but a reconstruction of U.S. Treasuries, a reshaping of the dollar, and an extension of sovereignty.