Hard Money Project Raison d'être

The Gold Standard for the digital age

Incentives to use a SELF-SOVEREIGN DIGITAL CURENCY

Self-regulating currencies prevent insider capture

Bad Currency Systems can distort economies

Currencies are a requirement of economies

Product-Market Fit

THE HARD MONEY PROJECT

Explainer

CURRENCY DEMAND C

CURRENCY DEMAND B

CURRENCY DEMAND A

Payment for Financial Contracts OR Investments/ Insurance

Payment for Exchanging Currencies or Assets

Payment for Economic Goods and Services

X : 1

Price = Unitary Ratio

Input Spending

Tokenized Economic Object Good or Service

Tokenized Financial Contract

Debtor Issuer

Z : 1

Interest/ Price = Unitary Ratio

Creditor Investor

Tokenized Currency

X : 1

Price = Unitary Ratio

Payee

Tokenized Economic Object Good or Service

Payer

Tokenized Currency

Y : 1

Foreign Exchange = Unitary Ratio

Seller

Tokenized Currency B

Buyer

Tokenized Currency A

Unleashing Asset-Object Tokenization Power

NATIVE CURRENY SYSTEM for a Global Payments Settlement Ledger

Self-Sovereign Digital Currencies (SSDCs)

CRYPTO w/ Deflarionary Supply + Pegs

TOKENIZED GOLD/ Commodities + Pegs

CRYPTO w/ Infinite Supply + Peg Tokens

FIAT CURRENCY + Peg Tokens (Stablecoins)

CRYPTO w/ Finite Supply + Peg Tokens

Stablecoin Challenges

Peg=Dependency

Explainer

Economic Distortions

Economic Distortions

Currency Value

Currency Value

STABLE ECONOMY & PURCHASING POWER

DEFLATIONARY

INFLATIONARY

ECONOMIC CONDITIONS

ELASTIC

DETERMINISTIC

SUPPLY NATURE

FIXED

Towards more inclusive currency for society

DIGITAL CURRENCY MAP Possibilities and their characteristics

Explainer

RAI ( Reflexer)

SSDCs

Fiat ( CBDC)

Nuon ( Fflatcoin)

OHM ( Olympus DAO)

Libra ( Facebook)

USDC ( Circle)

Digital Currency Example

EXCHANGE RATE ARRANGEMENTS

dollarization

CURRENCY BOARD

CONVENTIONAL PEG

HORIZONTAL BANDS

CRAWLING PEG

CRAWL LIKE

FREE FLOAT

PEG FLEXIBILITY

Ex: Foreign Exchange Reserves Foreign policy tools

Primary POLICY TOOL

Foreign Exchange Rate

TARGET Nonimal Anchor

Ex: Policy Interest Rate/ Monetary aggregate

Primary POLICY TOOL

Domestic Economic Indicators

TARGET Nonimal Anchor

DEPENDENT / PEGGED CURRENCY SYSTEMS

INDEPENDENT CURRENCY SYSTEMS

Price/ Exchange Rate Anchor

Independence and Dependence in elastic digital currecy systems

PEG = DEPENDENCY lacking Sovereignty by design

Reserve-Backed Tokens (RBCs)

Hardest Settlement Asset (Fiat IOU)

PULIC BACKSTOPS

Explainer

Paity NO Guaranteed

Paity Guaranteed

(IOUs Chain)

Guaranteed Parity Redemption

Non Redeemable

No Guaranteed Parity Redemption

Fiat Currency Value (PP) regulated here

Redemption chain of Claims Promising Fiat Value

L4

L3

L2

L1

LIABILITIES

ASSETS

Fiat Backed Stablecoins

Deposit Tokens

Reserved-Backed Tokens (RBCs)

'Decentralized' Stablecoins or Flatcoins

rCBDC & wCBDC

CB Deposits/ Reserves

Fiat Backed Stablecoins

Deposit Tokens

rCBDC & wCBDC

Credit

CB Deposits/ Reserves

"DECENTRALIZED" PROTOCOLS

L4

NON-BANKS (E-MONEY)

L3

COMMERCIAL OR NARROW BANKS

L2

CENTRAL BANK

L1

Asymmetric rules preventing fungibility between currency issuers

STABLECOINS Fiat Currency Pegs without parity guarantee

Hover to expand

FREE ENTRY & EXIT

Our analysis indicates that a common Global Payments Settlement Ledger, with transactional information accessible to the protocol mechanisms, enables the establishment of an immutable Digital Currency Standard. This standard serves as a rule set governing the following principles for each community's Self-Sovereign Digital Currency.

VALUE-BACKED CURRENCY

AUTONOMOUSLY ADAPTABLE CURRENCY SUPPLY

NON-COMPETITIVE SSDC CURRENCY EXCHANGES

DEMOCRATIZING THE DISTRIBUTION OF NEW CURRENCY

Time for a Digital Currency Standard for all

SSDC Self-Sovereign Digital Currencies

NETWORK &ECOSYSTEM

ECONOMIC

DEMOCRATIZED

EMPOWERMENT & AGENCYIndividual and collective

True Seigniorage Income

Freedom of Economic Choice

Secure Web3 Custody

HODL Digital Commodities for stable value

Democratic Decision-Making

Robust DLT Payments System

EarlyParticipation Benefits

Community Wisdom & Cooperation

Currency Debasement Resistant

Native Currency System

Inter-Community Cooperation

Network Validation Rewards

Backed by Appreciating Money

XRD Appreciation Pressures

Utility in Ecosystem Evolution

Censorship & Corruptability Resistance

Financial Inclusion for all

Community Participatory Budgeting

Stable Purchasing Power Currency

INCENTIVES FOR HOLDING & TRANSACTING WITH SSDC

General Conclusions

The Role of CB Liabilities

Achieving uniformity in Bank-Issued Currency Claims

Parity challenges for issuers without Public Backstops

The nature and risks of assets backing IOUs matter

Currency issuance in Fiat Systems: IOU claims backed by assets

However, can this promise always be guaranteed?

As a citizen or business, it's crucial to trust that the money tokens I transact with – which underpins my income, stored wealth, and daily economic transactions – will retain parity in the purchasing power of a specified X fiat currency (e.g. USD) that I believe I have.

Conventionally, in Fiat Currency Systems with elastic supply, Commercial Banks generate deposit money through loan issuance. They then borrow liquid reserves from the interbank market or the central bank's discount window, lender of last resort, for payment settlements, withdrawals, or central bank requirements. This process yields a net interest as benefit for banks in the creation and distribution of new money (private seigniorage). In summary, new money in circulation is issued based on credit demand and distributed through the banking system (although not all agents are banked). The Central Bank, as the issuer of base money like bank reserves, regulates circulating currency through Monetary Policy, albeit challengingly. The conventional tool is passive, adjusting the policy interest rate range, the incentive for credit, in a credit-elastic system, and proactive tools are used contextually for influencing this rate, including open market operations and reserve requirements (not currently). These inject or withdraw central bank liquid reserves from the banking system. Monetary policy employs various instruments within these tools, tailored to the economic context and policy framework. In these flywheel systems, National Governments are the largest legal debtor entity, financing themselves theoretically for public goods spending and repaying this debt by taxing the population or issuing more debt in need of monetization (Fiscal Policy), largely monetized by the central bank. However, they also govern the central bank, the fiat regulator. In cases where the independence between the central bank and the government is unclear, the latter can continually demand the monetization of their issued debt. Understanding the overall dynamics, it's clear that not all Fiat Currency Systems are equally disciplined in their central bank-regulated policies, but none will ever achieve economic balance. The majority of the independent central banks have a positive inflation target in their policy framework, that we know it leads to redistributive consequences and social inequality, just by design.

The need for a native on-chain currency system leads us to decide on the nature of its money supply over time. This can be fixed, determined by a time-based multiplier that can increase or decrease, or elastic, requiring backing by assets for expansion or contraction, and a monetary policy framework to regulate it. If an economy's purchasing capacity, indicated by its economic outputs or objects, isn't rigid or predictable and is influenced by various factors, then the purchasing power, represented by circulating currency, also can't be rigid but must have necessary flexibility to avoid causing distortions and imbalances in the economy. This capacity is influenced by heterogeneous factors in each geography and economy, such as technology, labor productivity, resource availability, and consumer demand. A monetary system puts inflationary or deflationary pressures when the velocity or currency spending goes to Demand A (Economic Payments). Monetary policy need to be calibrated to demand A to not distort the economy. But it is important to understand the nature of its money supply to understand the pressures it may converge to if widespread use. A marginal increase in the money supply ready to circulate and be spent, without a corresponding increase in economic objects, will cause inflationary pressure in the economy. Inflationary currencies lose purchasing power. A certain amount of currency buys less goods and services overtime. Conversely, a marginal increase in economic objects due to productivity, without a matching increase in monetary objects, will lead to deflationary pressure. Characteristics of both: Deflationary currencies gain purchasing power. A certain amount of currency buys more goods and services overtime. while induces a decrease in nominal GDP. Both cases are distortive for an ordered society if currencies with these characteristics are widespread used.