Proposal : Government bonds token

General
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Proposal : Government bonds token

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Summary
  1. summary

This white paper aims to break away from debt-dependent deficit compensation in the financial management of the state and local governments and to improve financial transparency and efficiency.

Use tokenized government bonds and local bonds (Tokenized Sovereign and Municipal Bonds) to propose a new fiscal model that immediately compensates for the deficit.

Characteristics:

• Instead of increasing debt by issuing deficit government and local bonds, immediately make up for it with sales revenue

• Automate interest payment and redemption on the blockchain

• Ensure transparency to investors, citizens, and supervisory institutions

• Financial management is possible with zero debt

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  1. New model: Make up for the deficit with token government bonds and local bonds

2.1 Tokenization of government and local bonds

• Digital assetization of bonds on blockchain

• Investors and citizens can purchase directly

• Automate interest payment and redemption with smart contracts

2.2 Make up for the deficit with zero debt

• Use sales revenue directly as a financial resource

• Zero or reduce the interest burden

• No new debt will be incurred to make up for the deficit

2.3 Adjustment for local governments

• Set the issuance scale flexibly according to the financial size of the local government

• Linkage with citizen participation purchase (cloud bond)

• Setting conditions according to the credit gap between local governments

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  1. Technical and financial image

An item Conventional type New model (token bonds)

Make up for the deficit National subsidy + issuance of local bonds Token bond sale → Immediate deficit compensation

Debt burden Interest payment available Reduce the interest burden / zero

Management Financial departments and financial institutions Automation with blockchain + smart contract

Transparency Partially High transparency, transaction history can be disclosed

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  1. Points of realization

  2. Securing market trust

• Securing backing assets that investors and citizens can trust in the purchase value

• Design according to the credit gap between the state and local governments

  1. Efficiency through digitalization

• Tokenization of government bonds and local bonds on the blockchain

• Automate redemption and interest payment

• Reduce intermediate costs and improve transparency

  1. Legal system development

• Financial rules that make it possible to “proct account for” government bonds and local bonds as sales

• System design that can be legally issued even with zero debt

• Ensuring the legal integrity of the country and the province

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  1. Expected effect

• Immediacy of deficit compensation

• Interest burden reduction, financial management with zero debt

• Improving national and local financial transparency

• Building a financial management model with citizen and investor participation

• Improving financial independence and reducing intermediate costs

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  1. A summary

• Unlike the conventional deficit compensation model, it is possible to make up the deficit immediately and directly by selling token government bonds and local bonds.

• With digital bonds + blockchain, no interest burden, transparency assurance, and management efficiency can be improved.

• To achieve it, it is essential to ensure market trust and develop a legal system.

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:light_bulb: Supplement

• An integrated model that can be applied to both the state and local governments

• The issuance scale and yield can be flexibly set according to the creditworthiness and financial size.

• Achieve higher transparency and efficiency than conventional models by purchasing citizen-participatory tokens and automatic redemption through smart contracts

1 Like
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I thought that was the plan all along.

1 Like