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by jraedisch
2431 days ago
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What money is going to be fully reserved? Base money or credit money or both? What happens to new credit money? How do you keep the blockchain based currency from trading at a different value, e.g. me not believing in it selling USDf for real USD? (All not answered in F.A.Q..) |
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1. The USD that you can use to unlock USDf (forked dollars/digital gold) is limited to deposits at commercial banks and credit unions. The public does not have access to electronic base money, so it's not included.
2. The quantity of USDf you can unlock is based on your historic bank balances, as verified during a defined window in the past. New credit money created after that point in time doesn't affect those past balances. To the extent that the owners of new USD wish to acquire weight for them, they'd need to purchase USDf, increasing its value. That is sort of the whole point: if governments keep inflating their money, the "forked" version with guaranteed scarcity will gradually increase in value.
3. USDf will trade at a different value than USD. At first, a much lower value. The idea is for them to be employed in a hybrid unit of account, USDw, where 1 USDw = 1 USD + 1 USDf.
A crypto-weighted dollar (i.e., USDw) will trade at a premium over a USD, since it is a USD + cryptographic weight. Think of it like a stablecoin that also comes with Bitcoin-like inflation protection. However, it's also possible to use USDf as an independent asset, and that will be convenient in use cases where transferring USD on existing payment rails isn't practical.