The following proposal is for the creation and distribution of a complimentary currency to be launched and primarily used in Wales.
The currency will be pegged to Sterling pounds in value, backed by physical fine (pure) Silver in secure vaults, universally transferable via Blockchain technology and locally transferable via notes, coins and debit cards.
There is yet to be an established name for this complimentary currency but for the purpose of this proposal we will refer to it as Arian Go Iawn (pro. ah-ree-an go ee-awn), or AGI, which means Real Money (or Real Silver) in English. Arian has a double meaning of ‘money’ and ‘Silver’.
Why create a complimentary currency? What’s wrong with Sterling?
Money is a means of exchanging goods and services, storing value, and measuring value. To work, money must also have a wide acceptance as a means of payment.
Fiat currencies such as Sterling are:
- good for exchange of goods and services due to wide-scale acceptance
- poor store of value due to inflation growing faster savings interest
- good short-term measures of comparative value (but poor long-term)
Precious metals are:
- poor for exchange of goods and services
- good store of value being resistant to the effects of inflation and economic depression
- good short-term and long-term measure of value
- poor for exchange of goods and services due to low awareness / acceptability
- poor store of value due to price volatility
- poor measure of value long-term or short-term due to price volatility
There are however 4 main advantages to crypto-currencies over fiat and precious metals:
- Crypto currencies are more secure than either fiat and precious metals in both transaction and storage
- By removing middlemen (banks) crypto-currenies are cheaper to use and store.
- The ability to be be one’s own banker and less dependent on City of London banks
- Not being debt-based like modern digital fiat, crypto-currencies are more stable in the long-term
The proposal includes combining the useful qualities of the 3 types of currency listed above while removing their shortcoming. Some compromises will have to be made to ensure its wide-scale adoption yet the finished product will be vastly superior to all other currency options. It will have optimum security and stability combined with low cost of storage or use.
Additionally, by remaining largely independent of the banking sector and global finance, it remains resistant to being negatively affected by systemic financial disruptions such as market crashes, bank failures, economic recessions and depressions.
Why for Wales?
Wales is an economically depressed area of Britain having faced decades of UK-led fictionalisation resulting in de-industrialisation, low-wages, over-reliance on public sector spending, and insufficient financial liquidity due to increasing debt deflation, among other factors. While Wales remains wholly dependent on Sterling (essentially City of London bank debt-based fiat) there is little hope of the Welsh nation significantly improving its economic fortunes.
AGI would provide the much needed extra liquidity to the Welsh economy stimulating significant economic activity enabling under-used or neglected resources, both human and natural, to be re-employed.
Also, Wales has a national / regional character and social solidarity conducive to the uptake of a beneficial social commodity such as the AGI. It is a country large enough to warrant a project of this nature yet small enough to not be seen as a threat to global finance. The social and entrepreneurial nature of the project would attract support from a wide range of political and social spectrum.
Why peg this complimentary currency to Sterling?
Pegging the AGI to the Sterling serves 3 purposes:
- It establishes the monetary value of AGI for ease of use and valuation.
- It allows frictionless interchangeability between Sterling and AGI.
- It allows each AGI to be backed by a specific amount of fine Silver, i.e. one pound Serling’s worth.
(There are a number of countries where 2 currencies are used side by side interchangeably. Examples include the Manx pound and Sterling in the Isle of Man, and the Bermudan and US dollar in Bermuda.)
How much fine Silver would back each unit of AGI?
One Stirling pound’s worth of fine Silver would back each AGI pound. (At the time of writing, that would mean that 1 AGI would be backed by approx 2.5 grammes of fine Silver.)
Why back AGI with fine Silver bullion?
Unlike Sterling that is fabricated out of nothing by commercial banks when they give loans, AGI will be backed by fine Silver. This will ensure its stability and trustworthiness. Holders of AGI will not simply be holding an empty ‘promise to pay the bearer’, but will have claim on actual physical fine Silver. Stability and trust are two components lacking in the current monetary arrangement. AGI will restore both those important elements.
Why not back it with gold?
Gold has also been a standard form of money for thousands of years, as has Silver. Other precious metals currently used as stores of value or speculative investment include Platinum and Palladium. The reason Silver is preferable is:
- Silver is a metal in increasing demand do to its super conductive properties used in electronics and solar power industry. It is widely acknowledged that demand will outgrow supply ensuring its market value will increase in coming years. It is one of the safest and valuable assets on the market today.
- Silver is part of the tradition of the British Isles, being used as money since ancient times. This is reflected in the fact that in Welsh, the world for Silver and money are the same – Arian.
So could a person exchange their AGI for fine Silver if they wanted to?
Yes. All holders of AGI will be able to exchange it for an equal value of fine Silver or Sterling if they wish (minus small transaction fee).
What is the importance of Blockchain technology to this project?
Blockchain technology is a trustless ledger system. By ‘trustless’ it means that you don’t need to put your trust in a third party (a financial middleman) to ensure that transactions are secure. Blockchain technology is the backbone of the Bitcoin (and many other alternative crypto-currencies). Blockchain technology currently facilitates the transaction of billions of pounds worth of financial transactions every day.
Using Blockchain technology would enable each user with a smartphone or computer with an internet connection to be their own bank, both receiving and sending money without having to go through a middleman or be charged excessive fees.
Would you be able to use AGI pounds like Sterling for general shopping?
If you use an AGI debit card, yes. The AGI would be exchanged into Sterling upon transaction. You could also use your AIG debit card to withdraw Bank of England notes from an ATM.
If you wish to spend AGI paper notes, then you will have to shop at retailers that accept them. Given the easy convertibility between AGI and Sterling we would expect most, if not all retailers in Wales would accept AGI notes for payment – as it would be in their financial interest to do so.
(Smart businesses would probably prefer to keep AGI notes given that they would be a more trustworthy and stable fund to hold.)
Will AGI be for use just in Wales or could I use it in England or even abroad?
The AGI project will be created and managed in Wales for Wales. However, when considering the nature of the Blockchain and the Internet, its potential scope is international. Given the increasingly precarious nature of debt-based fiat currencies throughout the world today, it is possible that AGI could grow to be an international currency used and accepted as a means of payment in many countries. This would not be a loss to Wales but its gain. Management and fees would remain in Wales and the Welsh economy.
How will this project be funded and launched?
The project will be funded and launched using an Initial Coin Offering, or ICO. The project will offer a token (coin) sale as an investment opportunity that can later be sold and bought on crypto-currency exchanges raising millions of pounds in funds to drive the project forward to completion. The investment coin will remain distinct from AGI’s.
Has anything like this been done before?
There is one project that combined precious metals (in this case gold) and Blockchain technology – digix.global – although it is simply an investment opportunity at present and not a usable currency.
There are also a number of projects that are combining crypto-currencies balances with debit cards to be used to draw cash at local ATMs or use with in-store card payment processors. For example see: mona.co
Who would manage the AGI project?
We are currently building a team of Blockchain technicians, economists, promoters, and financial managers to get the project up and running. Various models of project management are being considered.
Will this project require government funding or support?
No, but we would welcome government endorsement and co-operation on both the national and local level.
Is it legal?
Yes. ICO’s, crypto-currencies, and “reward tokens” such as AGI paper notes are largely unregulated in the UK.