Ensuring the independence of the central bank and the tax-free, universal basic income (UBI) system: currency stabilization with stablecoins
Summary
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Background and purpose
The conventional financial system has been operated on the premise of central bank intervention, interest rate policy, and tax system.
This system aims to ensure stable currency circulation and the sustainability of UBI on the premise of the following.
• Banning the central bank’s intervention
• Tax-free society
Private stable coins and algorithm control reduce the risk of currency fluctuations.
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Basic conditions for system design
Central bank independence and prohibition of intervention
• There is no interest rate manipulation, quantitative easing, or currency supply adjustment.
Tax-free policy
• Financial resources are not dependent on tax revenue, but secured with state-owned assets and stablecoin collateral.
Universal Basic Income (UBI)
• A certain amount is distributed to all citizens every month.
• The distribution amount can be automatically adjusted according to the currency value and market conditions.
Countermeasures against currency fluctuations
• Use collateral-type stablecoins or algorithm-type stablecoins.
• Automatic supply adjustment, distributed collateral, and peg maintenance through smart contracts.
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Financial resources and currency supply
• Diversification of financial resources
State-owned assets and public utility profits
Collateral funds from private stablecoin issuers
Reserve funds and emergency assets
• Currency supply
• Smart contracts are automatically adjusted according to market demand and inflation.
• Stabilize purchasing power by linking the UBI distribution amount.
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Risk avoidance mechanism
Currency value stability
• High collateral rate stable coin
• Automatic supply adjustment by algorithm
• External shock resistance due to multi-currency and diversified collateral
UBI and fiscal sustainability
• Automatic adjustment of UBI amount
• Diversification of financial resources + establishment of reserve funds
Economic shock and liquidity risk
• Reducing market dependence by dispersing issuers
• Automatic adjustment by smart contract
• Insurance compensation mechanism
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Surveillance and transparency
• All currency supply, UBI payment, and collateral status are disclosed on the blockchain.
• Automatic monitoring and regular audits prevent fraudulent issuance.
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Conclusion
Banning the intervention of the central bank, a tax-free society, and the UBI payment system are theoretically possible.
The following are essential to guarantee stable currency value and economic resistance.
• Combination of collateral-type and algorithm-type stablecoins
• Automatic adjustment by smart contract
The point of the system design is the distributed control of the following three layers.
1. Currency issuance and supply
2. Distribution of financial resources and UBI
3. Market monitoring and automatic stabilization