Government Budget and Sovereign Universal Basic Income Using Stablecoins Independent of Central Banks

General
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Government Budget and Sovereign Universal Basic Income Using Stablecoins Independent of Central Banks

Introduction

This white paper proposes a new government budget operation model independent of central banks, utilizing blockchain technology to distribute a stablecoin called “sovereign USD1” equally to all citizens. Based on this framework, it aims to realize a sovereign Universal Basic Income (UBI) system.

Background

Traditional government budgets are mainly financed through tax revenues and government bond issuance. However, recent issues such as fiscal opacity, currency instability, and increasing economic inequality have become social problems. A new approach that does not rely on central bank-controlled money supply is required.

Proposal Overview

・ Introduction of WLFI National Wallet
Citizens are provided with digital wallets, and the government distributes the stablecoin “sovereign USD1” equally in an amount corresponding to government bond issuance.

・ Government borrowing and distribution to citizens
The government raises funds by “borrowing” from citizens, and the issued stablecoins are directly credited to citizens’ digital wallets.

・ Sovereign Universal Basic Income (UBI)
The government periodically pays UBI in digital currency, which is positioned as “repayment of borrowed funds” to the citizens.

Advantages

・ Increased transparency and accountability in budgeting
・ Direct and real-time management of government funding and expenditures
・ Providing economic stability and participation opportunities directly to every citizen
・ Establishment of a new currency circulation model independent of central bank monetary policy

Technical Composition

・ Use of blockchain technology with a distributed ledger to ensure transaction transparency and tamper resistance
・ Stablecoins backed by foreign currency such as the US dollar or other substantive value mechanisms under consideration
・ WLFI National Wallet issued individually to citizens for transactions, savings, and consumption

Challenges and Future Outlook

・ Balancing the sustainability of UBI and government fiscal health
・ Designing mechanisms to control inflation and stabilize currency value
・ Legal system development and promotion of public understanding
・ Coordination with the international financial system and impact analysis

Conclusion

A new framework for stablecoin issuance and government budget operation beyond central bank control contributes to the realization of a fair and sustainable economic model in the digital age. This proposal aims to serve as a forward-looking policy foundation that balances citizens’ economic freedom with government fiscal transparency.

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I like this proposal! ……… I asked Grok to analyze! I asked this: ( analyze with your own understanding and logic excluding reports, posts, official documents etc. I want pure logic answer, could this eradicate poverty, making each individual “the bank”?) and this was the reply:

Pure Logic Analysis Based solely on deductive reasoning from the proposal’s described mechanics, without reference to any external data, historical precedents, or specific implementations, let’s break down the core ideas and evaluate the key questions: Could this system eradicate poverty? And does it make each individual “the bank”?The proposal outlines a system where the government issues a stablecoin (“sovereign USD1”) equally to all citizens via digital wallets (WLFI National Wallet), positioning this as a form of borrowing from citizens. UBI is then distributed periodically as “repayment” of these borrowed funds, all on a blockchain for transparency, backed by assets like foreign currency, and independent of central banks. The logic here assumes: (1) equal distribution ensures universality, (2) blockchain prevents tampering and enables real-time tracking, (3) backing mechanisms stabilize value, and (4) direct citizen involvement replaces traditional taxation/bond issuance with a participatory model.Making Each Individual “the Bank”:
Logically, this could partially achieve that concept by redefining the funding dynamic. In traditional systems, governments borrow from institutions or markets (e.g., via bonds), centralizing power. Here, by “borrowing” directly from citizens through stablecoin issuance and crediting their wallets equally, every individual becomes a de facto lender—holding a claim on government repayments via UBI. This inverts the flow: citizens aren’t just taxpayers but originators of the currency supply, with wallets acting as personal “branches” for transactions, savings, and consumption. However, this is illusory in pure terms because:

  • The borrowing is not voluntary or interest-bearing in the classic sense; it’s imposed equally, so individuals aren’t choosing to lend like a bank would.

  • True “bank” status implies control over lending decisions, risk assessment, and profits—here, citizens have passive receipt, not active management. The government still decides issuance amounts and repayment (UBI) schedules, so power remains centralized.

  • If the stablecoin is redeemable or usable for real-world value, individuals gain some banking-like autonomy (e.g., peer-to-peer transfers without intermediaries), but only if the system avoids collapse from over-issuance or mismanagement.
    Overall, it approximates making individuals “the bank” by democratizing funding origins, but falls short of full empowerment, as it doesn’t grant decision-making authority or risk-reward symmetry.

Eradicating Poverty:
In theory, this could contribute to poverty reduction but not fully eradicate it, based on logical dependencies:

  • UBI provides a baseline income floor, distributed equally and periodically, which logically lifts the poorest by guaranteeing resources for essentials, assuming the amount is sufficient relative to living costs (e.g., if UBI covers food/housing, it prevents absolute poverty). Equal distribution favors the poor disproportionately (as a fixed amount is a larger % of low income), promoting equity.

  • Independence from central banks could stabilize via blockchain transparency (reducing corruption) and asset backing (preventing devaluation), ensuring UBI retains purchasing power. Direct wallet credits bypass bureaucracy, enabling immediate use.

  • However, eradication fails logically on several fronts:

    • Poverty is multidimensional (income, access to education/healthcare, opportunities), and UBI addresses only income; it doesn’t solve structural issues like job scarcity or skill gaps.

    • Sustainability: The system relies on government “borrowing” without clear repayment sources beyond the stablecoin loop—if expenditures exceed inflows (e.g., from taxes or asset yields), it creates a deficit spiral, leading to inflation (more issuance dilutes value) or cuts to UBI, reintroducing poverty.

    • Inequality persists: Equal UBI doesn’t account for varying needs (e.g., disabled vs. able-bodied), and wealthy individuals benefit equally, potentially widening relative gaps if they invest UBI better.

    • External shocks (e.g., economic downturns reducing backing assets’ value) could destabilize the stablecoin, eroding UBI’s effectiveness.

    • Scale: For a large population, equal distribution means small per-person amounts unless issuance is massive, risking hyperinflation-like effects.
      In sum, it could mitigate poverty by providing a safety net and economic participation, but eradication requires perfect execution (infinite sustainable funding, zero inflation, comprehensive social supports), which is logically improbable in a finite resource system.

The proposal’s advantages (transparency, direct management) logically outweigh some traditional flaws (opacity, inequality), but challenges like inflation control and legal hurdles introduce risks that could undermine both goals. A hybrid (e.g., tiered UBI based on needs) might refine it, but as stated, it’s a promising but incomplete framework.

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I then asked Grok this! (rewrite the proposal with your solutions, noting where you have made the suggestion or change and a brief explanation why, same as before exclude outside material as much as possible and refine this proposal with logic and mathematical reasoning,) and this was the reply:

Government Budget and Sovereign Universal Basic Income Using Stablecoins Independent of Central Banks

Introduction

This white paper proposes a new government budget operation model independent of central banks, utilizing blockchain technology to distribute a stablecoin called “sovereign USD1” to all citizens in a hybrid manner that balances equality and proportionality. Based on this framework, it aims to realize a sovereign Universal Basic Income (UBI) system.

[Change Note: Modified the distribution description from “equally” to “in a hybrid manner that balances equality and proportionality.” Reason: Pure equal distribution may alienate citizens with varying contributions (e.g., higher taxpayers funding more), leading to dissatisfaction similar to investment scenarios where larger stakeholders feel under-rewarded. A hybrid ensures broader acceptance by addressing both equity (for inclusivity) and fairness (based on input), logically reducing opposition and enhancing system stability.]

BackgroundTraditional government budgets are mainly financed through tax revenues and government bond issuance. However, recent issues such as fiscal opacity, currency instability, and increasing economic inequality have become social problems. A new approach that does not rely on central bank-controlled money supply is required.

Proposal Overview・

Introduction of WLFI National Wallet Citizens are provided with digital wallets, and the government distributes the stablecoin “sovereign USD1” in a hybrid model corresponding to government bond issuance: 50% of the total issuance distributed equally among all citizens, and 50% distributed proportionally based on verifiable citizen contributions (e.g., prior tax payments or other measurable economic inputs).

[Change Note: Introduced a hybrid distribution model splitting issuance 50/50 between equal and proportional shares, with proportionality tied to contributions like taxes.

Reason: Mathematically, if T is total stablecoin issuance, N is number of citizens, and C_i is contribution of citizen i (sum(C) = total contributions), then equal share per citizen = (0.5T)/N, and proportional share for i = (0.5T) * (C_i / sum(C)). This formula ensures small contributors get a meaningful base (appealing to the majority), while larger ones receive scaled rewards (proportional to input), logically mitigating inequality without inflating T. The 50/50 split is adjustable (e.g., 60/40 if data shows skewed contributions) to optimize fairness, derived from balancing utility functions where U_small = base + small_prop (high relative gain) and U_large = base + large_prop (absolute alignment with effort).]

・ Government borrowing and distribution to citizens

The government raises funds by “borrowing” from citizens, and the issued stablecoins are directly credited to citizens’ digital wallets according to the hybrid model.

[Change Note: Specified “according to the hybrid model” instead of implying pure equality. Reason: Logically extends the borrowing concept to recognize varying “lending” capacities; equal borrowing ignores contribution differences, potentially discouraging high contributors and leading to suboptimal participation rates.]

・ Sovereign Universal Basic Income (UBI)

The government periodically pays UBI in digital currency, which is positioned as “repayment of borrowed funds” to the citizens, distributed via the same hybrid mechanism to maintain consistency.

[Change Note: Added hybrid distribution to UBI payments. Reason: Consistency in mechanics prevents perceptual unfairness; if initial issuance is hybrid, repayments should mirror it to avoid eroding trust. Mathematically, periodic UBI as a fraction of repayments (e.g., R per period, where R = annual repayment target) split 50/50 ensures long-term equity, as cumulative UBI for i = sum(equal_share + prop_share) over time, stabilizing economic incentives.]

Advantages・

Increased transparency and accountability in budgeting ・

Direct and real-time management of government funding and expenditures ・

Providing economic stability and participation opportunities directly to every citizen, with rewards scaled to both universal access and individual contributions ・

Establishment of a new currency circulation model independent of central bank monetary policy

[Change Note: Expanded the third advantage to include “with rewards scaled to both universal access and individual contributions.” Reason: Logically highlights the hybrid’s dual benefits, addressing poverty (via equal base) and motivation (via proportionality), which pure equality might not sustain if high contributors withdraw support.]

Technical Composition・

Use of blockchain technology with a distributed ledger to ensure transaction transparency and tamper resistance ・

Stablecoins backed by foreign currency such as the US dollar or other substantive value mechanisms under consideration ・

WLFI National Wallet issued individually to citizens for transactions, savings, and consumption, with built-in tracking for proportional factors (e.g., linked tax records)

[Change Note: Added “with built-in tracking for proportional factors (e.g., linked tax records).” Reason: Logically necessary for implementing proportionality; without verifiable data, the hybrid fails. Blockchain’s immutability supports this without privacy invasion if anonymized, ensuring C_i calculations are auditable and fair.]

Challenges and Future Outlook・

Balancing the sustainability of UBI and government fiscal health, including monitoring the hybrid split to prevent over-reliance on proportionality (which could exacerbate inequality) or equality (which could dilute incentives) ・

Designing mechanisms to control inflation and stabilize currency value, such as dynamic adjustments to the hybrid ratio based on economic metrics (e.g., if Gini coefficient rises above threshold, increase equal share) ・

Legal system development and promotion of public understanding ・

Coordination with the international financial system and impact analysis

[Change Note: Enhanced the first two challenges to incorporate hybrid-specific considerations, with a dynamic adjustment example. Reason: Logically, fixed ratios may not adapt to changing conditions; a feedback loop (e.g., if inequality metric G > 0.4, shift to 60% equal) uses mathematical thresholds to maintain equilibrium, preventing system failure from static design.]

Conclusion

A new framework for stablecoin issuance and government budget operation beyond central bank control contributes to the realization of a fair and sustainable economic model in the digital age. This proposal aims to serve as a forward-looking policy foundation that balances citizens’ economic freedom with government fiscal transparency, refined through a hybrid distribution to ensure broad consensus and long-term viability.

[Change Note: Added “refined through a hybrid distribution to ensure broad consensus and long-term viability.” Reason: Logically summarizes the core improvement; hybrid resolves potential disputes (as in equal vs. proportional debates), promoting adoption and sustainability by maximizing collective utility.]

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Grok’s analysis of “making each individual ‘the bank’” is incorrect. The correct interpretationi is “making each individual a ‘decentralized FRB.’”

While WLFI presents one approach, my proposal differs significantly. It imagines a future where the sovereign people of the United States directly lend to the government, effectively replacing the Federal Reserve’s role.By doing so, the government repays its debt to the people through a method called Sovereign UBI, eliminating fiscal deficits and removing the need to pay taxes.

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But thanks to you, I was able to reconsider my ideas. I truly appreciate it.

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It was I that asked Grok if whether each individual would be “the bank”, was just my understanding (even if wrong), you have prepared an excellent idea! I like it, just wanted to see what AI would see that I did not, I also asked if this idea could eliminate poverty if exorcised correctly!

Well done!

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Not only poverty, but also the structure of global domination by central banks under the Bank for International Settlements will change, and as a result, wars around the world will disappear.

I believed that on the WLFI forum, I could arrive at this answer. Thank you very so much.