The gradual disintegration of the global rules-based economic order requires a new ‘Bretton Woods’ conference to reaffirm the benefit for all countries of internationally accepted, treaty-based economic relationships and to reinvent the institutions to manage those rules.

Bretton Woods system was the first fully negotiated monetary order to govern monetary relations among countries in the world. The system stressed obligations and responsibilities for each country to maintain stability in exchange rates.

Hong Hao, chief China strategist of BOCOM International Holdings, expressed his concerns as economic nationalism is again rearing its ugly head and globalization may have a hard future.

Hong also added “it was clear that fascism was in retreat. I think the last twenty years was the best of times for globalization, but America's unilateral trade policies have been considered to weaken the dollar's role in the global money system.”

“There are clear blocks to such fundamental change. We already see countries using their own currencies for trade. I think it would take some time for other currencies to replace the U.S. dollar as the global reserve currency,” Hong said.

He also added that “many commodities in the world still price in U.S. dollar. For now about 70 percent of the transactions are done in U.S. dollar terms as well. I think China is going the right direction. In the sense that the Belt and Road Initiative is helping other emerging nations. And China also launched the RMB price cruel oil contract and RMB price gold contract. So it would take some time to change the system.”

There are risks to reopening the underlying basis for the institutional structure. The current challenges require a substantial rethinking of the international economic and financial architecture. One big challenge facing the international monetary system is cryptocurrency and it might just be a matter of time for Bitcoin or Libra to be the next big thing. 

He pointed out “U.S. congress raised so much concern about the rise of Libra as exchange media (...) Some other forms of currency other than the major currencies in the world are trying to replace U.S. dollars as a global exchange media (...) I think the government can still exert it's power on many of the digital currency.”