Bancor vs XRP: What Bretton Woods Teaches About Neutral Money

There was a moment when the world very nearly got a currency that belonged to no country at all. And it was designed by one of the most famous economics alive. And it had a name, Bancor, right? And in 1944, the world turned down a neutral bridge currency, and the dollar won. That matters to us because the whole pitch for XRP is that it can be a neutral bridge between currencies.

So, if you own XRP, learn why Keynes's neutral world currency lost to the dollar at Bretton Woods. It wasn't because the dollar was better than the technology. It was about who had the power in the room. And here's the part most people never hear. A neutral bridge was shelved once before, and ordinary savers paid.

Now, British families saw what their money was worth abroad cut twice in less than 20 years, overnight. And both times, I'm going to show you the exact rates. So, we'll do the story first, then we'll put XRP's bridge claim right next to it, fairly, with what really matches and what really doesn't. Keep half an eye on the top link in the video description, too. I'm going to explain it in a few minutes, and it was put there for people who are tired of someone else deciding what their savings are worth.

Because that's the feeling a lot of us know. The big decisions about money get made in rooms we'll never see, by people who we'll never meet. And we find out afterwards, usually when it's cost us money. Now, it happened to savers in 1949 and 1967. And if you hold crypto, you felt a version of it with every headline that moves the market while you're asleep.

So, let's go to the room, right? On the 1st of July, 1944, with the war in Europe raging, delegates started arriving at Mount Washington Hotel. Now, that's a little place in New Hampshire called Bretton Woods, if you didn't know. According to the Federal Reserve's own history of the conference, there were 700 and 30 of them, from 44 allied nations. And they stayed for about 3 weeks.

Now, their job was to stop the currency chaos of the 1930s from ever happening again, right? When countries had fought each other by cheapening their money to win trade. Here's how the IMF's own film about it, its founding, sets the scene. The fund is essential to winning and preserving peace. That is why the representatives of 44 nations here in Bretton Woods are taking steps to prevent a repetition of the currency chaos which has usually followed in the wake of war.

Currency chaos. Now, that was the enemy and everyone in that hotel remembered it well and two men had very different ideas about how to beat it. One was British and the other one was American and before I tell you whose plan won and what it cost ordinary people like us when the rates finally broke, let's get into first it all properly, right from the very beginning. As always, this is not financial advice, please do your own research. We're about to get deep into this and make sure you hit that subscribe button and let's get it.

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Before we meet those two men, let's stay with that problem for a second. Now, none of us were in the hotel and nobody asked a single saver in Leeds or Leicester what they thought and when the rates changed later on, people heard about it on the radio after the decision was made that was. So, in crypto it feels much the same. A regulator speaks, a big fund sells, a rumor goes round and our coins, they move before we've even had our breakfast. Now, you can't control those rumors, right?

But, you can control your own plan. So, a decision made somewhere else doesn't knock you off course. Am I telling you to buy XRP right now? No, I don't know your situation, I've never met you and there may be way better opportunities for you. But, what matters is having a clear reason for every coin that you own and knowing what you do about it if the ground moves underneath you.

Now, that's what our Altcoin Pro course is for. It helps you decide how big a slice of the savings a single coin deserves, where your coins are kept and what your plan is before the next big headline and not after it. So, getting started takes a couple of minutes. Go to the first link in the description, fill in the short form, simply book your free 50-minute call and one of the team will going to walk you through your own strategy, your own situation. There's no charge for it.

So, if you're just watching this on your phone, just tap more under the video and it's the first thing you're going to see. Do it now, guys, before the next headline makes the decision for you and then come straight back because Keynes' plan was far stranger than most people realized. Now, the British side was led by John Maynard Keynes. Now, one of the best known economists in the world at the time he was. So, in April 1943, more than a year before the conference, the British government published his plan.

He called it an international clearing union. The idea was clever, every country would keep an account at one central clearing bank and trade between nations would be settled in a brand new unit of money that belonged to nobody. He called this bankor and in the plan's own words, it was an international bank money fixed but not unalterably in terms of gold, right? No single country could print it, no single country could freeze it and here's the twist that really mattered. He wanted countries that built up huge surpluses to face charges as well, not just the old ones in debt.

So, in 1944, the country with the biggest surplus in the world was the United States of America and you could probably guess how that went down in Washington. IMF's own film is fairly blunt about what he actually was really after.

Keynes had a different vision [music] because he was worried about US dominance. He wanted a more independent [music] and a larger and more powerful institution that would really be a world central bank that would act as a counterweight to US economic power.

A counterweight to American power and then that's the heart of it, right? Bankor was neutral in purpose so no single nation could sit in the middle of everyone else's trade. The American side was led by Harry Dexter White, a senior official at the US Treasury. He had his own plan and he even had his own unit called the uniters. Now, worth $10 in gold they were but in practice, his plan was to put the dollar at the center and the White and his boss, the Treasury Secretary Henry, knew exactly how strong their hand was.

Britain had spent its savings fighting the war and badly badly needed American help. The historian Ben Steil who wrote a whole book on the conference put it like this.

At Bretton Woods, um Henry Morgenthau told the US delegation, quote, "Now the advantage is ours here and I personally think we should take it." Uh to which Harry Dexter White added, "If the advantage was theirs, that is Britain's, they would take it."

The advantage is ours and we should take it. Now, that sums up a lot of Bretton Woods in one sentence. According to Steil, the biggest prize of it all slipped in almost unnoticed. Watch this next clip.

And finally and very controversially, to accept the US dollar as the basic unit of account for global trade. And as you can imagine, the British resisted this fiercely. And in fact, Harry Dexter White used some rather remarkable ruses at Bretton Woods in order to push this through. Keynes did not even see it until he had left Bretton Woods.

So, what did they actually sign? Well, on the 22nd of July, 1944, the delegates signed an agreement that set up the International Monetary Fund. Look at it how it says each country's currency would be valued, right? In terms of gold as a common denominator or in terms of the United States dollar. Those few words put one country's money on the same footing as gold.

Now, in practice, other currencies were fixed to the dollar and the dollar was fixed to gold at $35 an ounce. Bancor never made it into the final deal. Now, that's how the dollar became the world's go-between. If a bank in Paris wanted to deal with a bank in Tokyo, well, the simplest route often ran through dollars. Countries held dollars in their reserves, priced much of their trade in dollars, and borrowed in dollars.

And Britain learned fast what that meant. As part of a big American loan after the war, Britain had to let the pound be swapped freely for dollars. That started on the 15th of July, 1947. Holders rushed to swap their pounds. Britain's reserve drained away, and on the 20th of August, 1947, barely 5 weeks, it had to be stopped.

Now, Keynes didn't live to see it, right? He died in April, 1946. White died in August, 1948. That's just days after appearing in front of a committee of Congress and denying claims that he passed secrets to the Soviet Union. Claims that many historians later came to accept.

But the Bancor idea never quite died, right? In March 2009, the head of China's central bank published a paper calling for what he named a super sovereign reserve currency, and he pointed it straight to the original Bancor. Right, the idea didn't get far, but when the IMF published the figures first quarter in 2026 this year, the dollar made up about 57% of the world's known central bank reserves, far ahead any other currency. So, here's where it gets personal, right? Under the system, the rates were fixed until suddenly they were not.

And when a fixed rate breaks it, overnight savers find out after the fact. On the evening of the 18th September, 1949, a Sunday, the Chancellor, Sir Stafford Cripps, announced the pound would no longer be worth $4.03. From the next morning, it was worth $2.80. That's 30.5% gone in one announcement. 18 years later, it happened again.

On the 18th of November, 1967, a Saturday, the pound was cut from $2.80 to $2.40. Put the two together and the pound that bought $4.03 in 1949 now bought $2.40 by the end of 1967. That's about 40% less in dollars, right? So, all for the same pound. Now, the next evening, the Prime Minister Harold Wilson went on television and said a line that people never let them forget.

"And it does not mean, of course, that the pound here in Britain, in your pocket or purse or in your bank, has been devalued." Technically, he had a point, right? The pound bought the same loaf at the corner shop the next morning, but anything that came from abroad or was priced in dollars cost more. And that fed through into prices at home. And it wasn't just the price, it was the freedom to protect the rate. Governments put limits on moving money abroad.

From late 1966, British holidaymakers could take only 50 pounds each out of the country for holidays in most foreign countries. 50 pounds. Now, that's how tight the leash was a currency had to hold a line set by someone else. So, when people say the dollar system brought stability, well, that's true for the system. For a lot of ordinary family, it meant rules they never voted for and losses they found out about on a weekend.

Now, let's be fair to XRP and put its bridge claim right next to this story. What's similar? Well, first, the problem. Bancor and XRP are both answers to the same headache. How do you settle between lots of different currencies without everyone needing a pile of everyone else's money?

Second, the word neutral. Now, Keynes wanted a unit no nation owned. Ripple has used the same language, and one of its own articles has neutral bridge currencies right there in its title. And third, both depend on other people choosing to use them. Bancor needed governments to sign up.

XRP needs banks and payments firms to decide it's the cheapest route. So, what's the difference? Well, quite a lot, honestly. One, Bancor never had something you could buy. It was an accounting unit between central banks, fixed to gold.

XRP is a traded coin with a price that moves every second, and that's what gives holders a reason to own it. And it's also what makes some banks nervous about holding it. Two, ownership. Bancor would have been run by an international body. XRP runs on a public ledger that Ripple says it doesn't control, but Ripple holds a large share of the coins.

In December 2017, it locked 55 billion XRP into escrow and realized in tranches of up to a billion a month. So, the ledger can be neutral while its supply is fairly concentrated. Now, number three, this is the big one, right? The dollar didn't win in 1944 because it was the best design. It won because the country behind it had the gold, the factories, and the leverage.

XRP has no government and no army behind it. That cuts both ways. Nobody can force the world onto it, but no finance minister can devalue it with a weekend announcement, either. And here's the honest twist, the dollar has moved onto the blockchain. Most stable coins, which are tokens meant to stay at $1, are tied to the US dollar.

Ripple even has its own, right? Here's Monica Long, Ripple's president in the August 2024, explaining why people like them.

Uh because [music] one, it's a way that you can hold US dollars if you don't have access to a traditional bank account. Two, it's a way to efficiently [music] buy other assets in the world of crypto.

A way to hold US dollars. So, on the blockchain, XRP isn't only competing with old bank accounts, it's competing with the dollar itself. Again, in a new cold, and that's the same rival Bankor lost to in 1944. Now, here's a fair objection. Some of you will say XRP doesn't need 44 governments to agree, it just needs to be cheaper and faster, and businesses will use it without anyone's permission.

And there's something to that, right? Bankor needed a political deal and lost in one room. XRP can win one payment corridor at a time, and nobody has to vote on it. But, the lesson from 1944 holds. The money that wins the middle of the system tends to be the one the biggest players trust and hold.

Being clever isn't enough, and Keynes was actually arguably the cleverest man in the hotel, and he lost. So, here's how the story ends. He got the IMF and the World Bank, which both outlived him, but not his neutral money. White got the dollar into the middle of the world's trade, where it sits more than 80 years later, and the people who paid the price of the fixed rates were families who never set foot in New Hampshire. For us, that's a real lesson.

A bridge currency is a fight about power as much as technology, and the rules of money can change on a weekend. The only part we control is our own plan, and I'd love to hear this one from you. Do you or someone in your family remember the 1967 devaluation or that 50-pound holiday limit, and what did it mean for you? Drop it in the comments below, guys, and if you enjoy money history told straight with the documents on screen, hit subscribe. Crypto carries risk and past results are no guarantee of future ones.

This is education, not financial advice. Stay bullish. Oh.

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