Mining Government Bonds System: Redesigning Currency Issuance for Inclusive Growth and Poverty Alleviation

General
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  • Mining Government Bonds System: Redesigning Currency Issuance for Inclusive Growth and Poverty Alleviation
Summary

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Executive Summary (Summary)

This white paper proposes a new “mining government bond system” that replaces the traditional system of government bond issuance and currency supply by the central bank. This system positions government bonds issued by the government as “mining assets”, and introduces a system that automatically issues new currencies by holding and using them by citizens and investors.

In this way, (1) the people can directly enjoy the benefits of issuing new money, (2) support the government’s fiscal deficit finance on a national basis, and (3) achieve poverty alleviation through the distribution mechanism.

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  1. Introduction (Introduction)

Currently, the fiscal deficit is structurally expanding in many countries, and central bank quantitative easing and government bond purchases play a central role in the currency issuance mechanism. However, the benefits of currency issuance in this process are mainly concentrated in financial institutions and asset holders, and the effect of directly improving income disparities and poverty problems is limited.

In order to solve these problems, this white paper proposes the “Mining Treasury Bonds System (MTBS)”.

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  1. Problem Statement (issue recognition)

• Widening disparity: Conventional monetary policies have a strong tendency to benefit the wealthy through asset effects.

• Indirectity of currency issuance: Government bond issuance and central bank operations are complex, and it is difficult for the public to become a direct beneficiary.

• Continue to poverty: The existing social security system alone has not been able to adequately solve structural poverty and income insecurity.

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  1. Concept of Mining Treasury Bonds (Basic Concept of the System)

3.1 Definition

“Mining government bonds” is a new mechanism that functions government-issued bonds as “trigger assets for currency issuance”.

3.2 Mechanism

  1. Government government bond issuance: As usual, the government issues government bonds, but some of them are designated as “mining government bonds”.

  2. Mining: When citizens and investors buy or hold mining government bonds, a new currency is automatically issued.

  3. Currency allocation: Newly issued currencies will be distributed through the following channels:

• (A) Distribution equivalent to interest to government bond holders

• (B) Direct benefits to poor and low-income households (through digital wallets)

• (C) Use as public investment funds

3.3 Technical factors

• Blockchain infrastructure: Make currency issuance and distribution transparent and verifiable.

• National Digital Wallet: Provides a basic account to all residents and guarantees the fairness of distribution.

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  1. Expected Benefits (Expected Benefits)

• Direct poverty alleviation: Strengthen the minimum living guarantee by directly distributing part of the new currency to the people.

• Democratization of government bonds and currency issuance: Currency issuance gains (signoridge) can be shared by the entire nation.

• Economic stabilization effect: During the recession, demand creation through currency issuance is automatically strengthened.

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  1. Risk Analysis (Risk Analysis)

• Inflation concerns: The risk that an increase in the supply of money will cause excessive inflation.

• Dilution of fiscal discipline: The government may facilitate the expansion of expenditure by making it easy for the government to obtain funds.

• Complexity of institutional design: the need to ensure the fairness of distribution and system safety.

• International credit risk: If it does not maintain consistency with the conventional government bond market, it may lead to the departure of overseas investors.

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  1. Implementation Roadmap (Implementation Roadmap)

  2. Pilot program: Issuance of mining government bonds in limited areas.

  3. Popularization of national digital wallets: Universal account provision.

  4. Development of the legal system: Revision of the Finance Act and the Currency Act.

  5. Nationwide expansion: Gradual introduction of the system.

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  1. Conclusion (conclusion)

The “mining government bond system” is an innovative model that fundamentally redesigns the currency issuance mechanism and integrates fiscal finance and national livelihood support. If this system is properly designed, it may function as a new tool for poverty alleviation, inequality correction, and economic stabilization.

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