Topic: Reserveum: How to create Ideal Non-Inflated money? - page 5. (Read 985 times)

Well of course any decent crypto out there wants to make big have to take care of the security side of their crypto. No matter inflated or non-inflated.

Distribution helps to increase the security of information and it helps to protect personal data. Also distribution helps to safety store different kind of information of personal computors of different users.

Bloomberg Press investigated the reserves of Tether stablecoin, and the results shocked the financial industry. Among others, USDT turned out to be tied down to such assets as short-term loans for large companies from China and loans for crypto-loan platforms like Celcius Network, and others.


The high attention of the US financial regulators to USDT tokens is no coincidence.  The stablecoin emission reaches 69 billion USD, with 49 billion tokens issued only this year. Such volumes could place the token issuer, Tether Limited, among the 50 largest banks in the USA, but the lack of transparency makes it an unpredictable and dangerous structure.


There were many accusations towards Tether Limited: lack of supply with USD, scarce information about the company leaders, giving out loans with a high risk of default. In media, Tether issuer is called 'an offshore hedge fund with a high risk level' and a potential fault of a crash of the whole crypto economy.


Meanwhile, Tether Limited continues rejecting all accusations and calls the Bloomberg research a compilation of unconfirmed speculations and an attempt to undermine their leading position.


A report by an audit company Moore Cayman on July 30th, 2021, confirms that USDT is fully supported by Tether Holdings Limited reserves that include: commercial securities amounting to 30,8 billion USD (49%), fiat and bank deposits that can be returned within 2 days and less - around 6,28 billion USD, or 10%, and US tax anticipation bills with a maturity less than 90 days and amounting to 15,3 billion USD (22,5%).


As Joe Biden's Administration has a project to include stablecoin issuers into the same legal framework as banks, Tether Limited with its full transparency might claim the place of the first crypto bank in the world. But an obligatory condition of it is a guaranteed free conversion of stablecoins into fiat, which at the moment doesn't look quite possible.


So, Tether stablecoin has been raising suspicions of not having any reserve at all for several years. Now, when the fact of supplies ties the company down to unreliable assets, the token reputation is in great danger. 
We were wondering, what scenario could make USDT more resilient - not being supplied with real assets or being supplied with the capitals from communist China?

Security of information and personal data is very important. Now there is demand in secure storage of information. Many people takes care about their personal data.

Every coin that already has developments and useful products for its users to use, the security system clearly already exists and will continue to be applied to the platform system at all times, because this is very important apart from the market price, so it will be a loss if Popular coins don't have this.

People must be sure that their data is secure and nobody can use them without agreement of owner of the data. To do this it is very important how secure the data is hold.

Security of personal data is very important. It is necessary to create demand in the coin and have a limited issue of the coin. In such case the price of the coin will grow.

There is no such thing called "ideal Non-Inflated money". The market keeps evolving and changing as we speak, both for crypto and real fiat. So trying to find a way to making it non-inflated is a moot point since no such thing exists. What you should instead be trying to make your coin or money have a goal, a purpose, and a reason why people should adopt and use your daily.

According to my teacher of economics at the university, the ideal currency shouldn’t be asset-backed. That is why he puts crypto above fiat money. How can it be? Actually, if we just agree with each other that this good is worth this sum of our ideal currency, we don’t need a collateral. Also, ideal currency can be transferred and used at the discretion of the person and mustn’t be controlled by anybody.

Of course, fiat money cannot be fully supported with liquid assets, moreover, it is impossible to exchange fiat money for this asset instantly. It is about digital money.

Creating digital money protected from inflation with purely mathematical methods seems quite possible to us.

All we need is to create a mechanism to syncronise the value of emission of such money and goods inflation. Then the value of such money would change along with the rising value of the goods.

A US Congress senator Cynthia Lummis declared requirements to stablecoins emissions, the main of them being: to supply stablecoins for 100% with cash reserves or its equivalents, and obligatory for all stablecoin issuers to have a status of a bank or a money market fund. Also, Ms Lummis outlined that it is necessary to perform regular audit checks of issuers.

Ms Lummis is known as crypto supporter. In 2020, her programme included discussing Bitcoin on a national level. In August 2021, Cynthia Lummis was one of the authors of an amendment to a crypto infrastructure law - they were asking to exclude some companies of the crypto industry from the taxation plan. Today, on September 30th, there will be final voting on this law.

The main source of argument is the generalized definition of a 'broker' that is supposed to be given to the majority of industry participants, including non-custodian ones: miners, node operators, wallet developers, liquidity providers in DeFi protocols, etc. It will make them report users' operations to the Department of the Treasury, the US tax agency.

The US Ministry of Finances is also planning to introduce measures for stablecoins regulation. For instance, in September their plans to make stablecoin issuers provide for their easy converting to fiat became widely known. In the July session, they discussed perspectives for stablecoins and potential risks for end-users, the financial system and national security.

Stablecoin issuers show that they are partly or fully ready to accept regulation and taxation. In August, the Centre consortium that issues USDC declared its intention to transfer the token reserves into USD and government bills. USDT Tether Limiited issuer noted in its July report that the proportion of the funds and bank deposits that can be withdrawn in two days and less amounted to around 10%. Paxos company confirmed having 100% supply for every USDP and BUSD with US dollars or its equivalents.

It will fail to do so because the current financial system is too big to be linked to any asset, and many countries have printed trillions of dollars in the past year, so unless there is a third world war or a pandemic that leads to real changes, it is difficult to make fundamental changes in the current system .

Gold will fail to be a reserve of the currency, and therefore the closest is silver to be a substitute, provided that gold remains usable and some other psychological metals.

Digital money are good for reducing spending on printing money, but they will not resist inflation, but will only make it worse.

Bitcoin can become a non-inflationary global currency when it reaches a certain stage, and I think there is currently no such token that has reached a non-inflationary currency other than Bitcoin.

The American CryptoFed company, registered in Wyoming as the first decentralised autonomous organisation (DAO), sent a request to the United States Securities and Exchange Commission (SEC) for registering and trading an algorithmic stablecoin Ducat and the Locke governance token that is used to stabilize the first one.
Both coins will follow a service function in the blockchain designed by CryptoFed based on EOS with a DPoS consensus algorithm.

It turned out that CryptoFed made their application by Form 10 which is normally used for the registration of securities on stock exchanges. This is an obligatory requirement for companies with capital over 10 mln USD and with a number of stakeholders exceeding 750; the rest can take part of their free will. So now The American CryptoFed can expect their tokens registered within the next 60 days.

Officially, the Ducat stablecoin is presented as an asset safe from inflation/deflation that is used to save capital and make "free" transactions with high capacity. The Ducat rate will be stabilised by the Locke governance token. According to Marian J. Orr, a CryptoFed representative, managing the Ducat rate with the help of Locke is quite the same as the actions of the Fed in the open market.

If Ducat and Locke are successfully registered as securities, CryptoFed is planning to request permission for new emissions of tokens according to Form S-8. This will enable them to continue distributing non-traded and disqualified Locke freely as a stimulation.

Thus, The American CryptoFed is expected to become the first-ever company with crypto officially registered as securities. This was all possible due to the fact that Wyoming accepted a law that made cryptocurrencies equal to money in 2019 and to the times when crypto start-up Avanti and Bitcoin exchange Kraken were awarded the status of financial institutions back in 2020.

The idea to make a coin protected from inflation and deflation is really relevant now, however, the authors of Ducat don’t share the methods that help them reach this stability of the coin’s purchasing value. Looks like these will be centralised methods. Which means that these methods will be similar to the methods the Fed uses to USD, yet the inflation for dollar is not equal to zero.

Which means that Ducat is another pseudo-stablecoin. What about you, dear forum users, what do you think of it?

The e-Money protocol is about to integrate their stablecoins into the Algorand blockchain platform and connect them to European currencies.

E-Money expects that after this partnership with Algorand, they will be developing faster and will manage to scale up their apps for accounts in currencies that have become popular with European users. These are stablecoins based on Euro (eEUR), Swiss Franc (eCHF), also Swedish (eSEK), Norwegian (eNOK), and Danish (eDKK) Krones.

Users' trust in e-Money stablecoins is associated with the fact that these tokens are supported with a reserve that consists of bank deposits and government's obligations, as well as quarterly audit revisions by Ernst & Young.

According to David Markley, the Algorand Director of Business Solutions, "Integration with e-Money will enlarge the common access to the Algorand ecosystem and will help the European market grow for many innovative and useful protocols in the network, from DeFi solutions to NFT trading platforms, and more."

We would also like to remind you that a year ago Algorand Foundation launched a business accelerator to support European start-ups in the blockchain ecosystem. To support such initiatives within the Algorand ecosystem, the Arrington XRP Capital company created a foundation of 100 million USD.

Also, last week Algorand Foundation opened a fund for developing DeFi projects. The company gave 150 million native ALGO tokens, which is equivalent to 318 million USD at the moment when this article is being written.

The day before yesterday, Tether processed an emission of one billion USDT on the TRON platform. The Tether CTO Paolo Ardoino claims that this is an autorised, but not an issued transaction, which means that these stablecoins will be used as inventory units for issuance requests in the future and as chain swaps.
According to the official report on Tether activity, the total amount of USDT in TRON is equal to 32 billion USD. In other words, over the current year, Tether turnover grew by 300%.

Other stablecoins are also growing: USDC capitalisation in 2021 grew by 600% - from 3,7 billion USD to 27.59 billion USD; DAI stablecoin grew by 380% - from 1,1 billion USD to more than 5 billion; the number of Binance stablecoins BUSD grew by 1230% - from 980 million to 12 billion tokens.
The further growth of Tether is so far contained by legal investigations and audit revisions of company assets. If the revision results are positive, it will return the attention of investors to Tether and the USDT stablecoin will continue growing.

We can see that Tether is inevitably gaining traction, but it is still questionable if the whole volume of Tethers and their cash cover are equivalent.
Even if we accept that Tether is 100% covered with convertible currencies, the mechanism of receiving this cash cover from the issuer remains completely unclear.
Can we call Tether an ideal currency? We don’t think so, what about the forum users?

Meanwhile, this is what going on in the world of stablecoins:


USDC issuer started creating "a global network of stablecoins".

The Centre consortium started a project for distributing USD Coin abroad.
The company already formed a team for managing the project and started negotiations with foreign partners about launching USDC in countries of Africa and Asia.

The Centre is planning to use stablecoins to make money transactions cheaper. Also, the company representatives mention that they might issue stablecoins that would be connected to other fiat currencies. It is planned to start the distribution of USDC with the countries of Europe.

Today, USDC stablecoin is present in Tron, Ethereum, Solana, Algorand, and Stellar. It is planned to issue the coin based on Polkadot, Avalanche, Hedera, Celo, Nervos, Flow, Kava, Stacks, and Tezos.

Another ambitious project of the issuer company is to use USDC as a payment method. This is why they are planning to integrate USDC into NFT, non-fungible token, system.

One more step in this direction is signing a contract with Visa company that has already linked its global system to USDC and started testing the account system in USD Coin.

We would like to remind you that USDC, unlike USDT, has a stronger regulatory base behind it, yet it can't be considered a perfect currency for payments due to its strong relation to the US political decision and the unpredictable SEC.

Hello. Thanks for your answers!

Absolutely, there are many stablecoins now that have financial provisions behind them. But none of them can take the place of ideal money.

1) If we look into centralised custodian currencies like USDT, their provision is very questionable. There is no way how one could reliably check the level of provision behind them, and, most importantly, there is no way how one could exchange these coins for a provision from the currency issuer (Tether company).

2) Centralised stablecoins like DAI are better in terms of transparency of their provision.

However, in both cases, stablecoins are not suitable for becoming ideal money.

By ideal money I mean not only the money supported by assets, but also the ones that are perfect for accounting and for saving. In other words, money with no inflation.

Let's say, we managed to create such money, without inflation, with full provision, and call it Ideal Reserveum.

What are the features of an Ideal Reserveum?

Who should regulate its emission, and how?

How should one form its provision?

How should one define its price?

Our world is not ideal so we can’t have ideal money as well. Satoshi created Bitcoin as a replacement for fiat money. Of course he wanted it to be the ideal currency, but even Bitcoin has many drawbacks like problems with scalability and energy consumption.
As far as I am concerned, the main features of ideal currency are user-friendliness and wide use, so people can use their money in a fast and comfortable way everywhere.

Backed by what kind of assets? Sounds like what can be done with token or even as NFTs.. . But I actually prefer those that can be backed more by physical assets.
In my opinion, the assets have to be divisible like good money are supposed to be else it can't really be ideal form of money...though you can solve the problem of divisibility by locking up the asset and have its equivalent worth in a divisible currency for buying things, once you spend all the money, you nolonger own the locked asset