Government token-linked universal basic income (UBI) system

General
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Government token-linked universal basic income (UBI) system

White paper (system design proposal)

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  1. Summary (Executive Summary)

This white paper is based on Government Token and linked to the legal currency issued and held by the central bank, so that it does not generate government debt and operates in an inflation-control manner. It shows the design of the Universal Basic Income (UBI) system.

In this system, the UBI Management Bureau is the government itself and is positioned as a new “Ministry of Finance by function”. Government tokens are neither bonds nor currencies, but non-debt and policy value units that do not involve repayment obligations, and function as Policy Backing of legal currency held by the central bank.

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  1. Background and issue recognition

2.1 Issues of conventional UBI

• Absence of permanent financial resources

• Concerns about debt expansion due to dependence on government bonds

• Inflation risk

• Conflict with central bank independence

2.2 Purpose of this system

• Guarantee the minimum income permanently and stably

• Don’t increase government debt

• Ensure institutional consistency with monetary policy

• Eliminate speculative and discretionary spending

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  1. Basic structure

3.1 Main body

• UBI Management Bureau: The government itself. A new Ministry of Finance function specialized in the UBI system.

• Central bank: The sole issuer of legal currency.

• National: UBI recipients.

3.2 Publications

• Government token

• Issuer: Government (UBI Management Bureau)

• Nature: Non-debt type and non-currency type policy unit

• Bondability: None

• Market distribution: Not available

• Central Bank-issued tokens/legal currency

• Issuer: Central Bank

• Nature: Legal currency (cash, reserves, CBDC, etc.)

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  1. Definition of government tokens

Government tokens have the following properties.

• Not a bond

• It does not fall under government debt

• No repayment obligation or interest payment

• Have institutional credibility based on parliamentary approval

• For universal basic income only

Government tokens are not “repaid value”, but are an institutional basis for issuing and holding legal currency.

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  1. Relationship with the central bank

5.1 Swap (system unit conversion)

The relationship between government tokens and central bank-issued tokens is not borrowing or collateral, but conversion of institutional units (Conversion).

• Government token → Held by the central bank as a policy asset

• Central Bank → Issuance and holding of legal currency

In this process, there is no debt relationship between the government and the central bank.

5.2 Central Bank Balance Sheet

• Assets: Government tokens (policy assets and non-receivables)

• Liabilities: Legal currency

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  1. UBI stable coin (payment method)

UBI is provided by means of payment with the following characteristics.

• Legal currency

• Purpose of use: basic living expenses

• No speculation and re-collateralism

• Cannot be diverted to general financial expenditure

Due to this limited purpose, the currency supply only acts on the minimum demand of the real economy and suppresses inflationary pressure.

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  1. Inflation control mechanism

  2. Rule-based management of issuance volume (linked to population, prices, etc.)

  3. The double key between parliamentary approval and central bank judgment

  4. Strict limitation of the purpose of use

  5. Automatic slowdown when the economy recovers

As a result, this system functions as an automatic stabilization device.

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  1. Legal and political organization

• Government tokens are not securities, so they are not subject to financial regulations

• Do not infringe on the central bank’s currency monopoly

• No impact on the government bond market

• System based on parliamentary sovereignty

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  1. Expected effect

• Permanent guarantee of minimum income

• Easing deflationary pressure

• Stabilization of tax revenue

• Substantial burden reduction of existing government debt

• Social and political stability

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  1. Conclusion

This system is a new public infrastructure that positions UBI as an extension of the national accounting and financial system, not “welfare” or “baramaki”.

Government tokens are not debts.

It is a unit of value for recording and operating the state’s intention to guarantee the minimum income as a system.

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(This book is a draft system design, and separate legislative measures are required for implementation in certain countries and jurisdictions.)

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