Introduction
In recent years, there has been a growing movement among economists and financial experts advocating for a return to asset-backed currencies. This push is driven by concerns over the instability and inflationary tendencies of fiat currencies, which are not tied to any physical asset. Advocates argue that an asset-backed monetary system can provide greater economic stability and reduce the risks associated with fiat currency.
Central URA (currency code: URU) exemplifies this approach by introducing a stable and reliable currency backed by real assets. The transition to a credit-to-credit monetary system, where money issuance is tied to tangible assets rather than arbitrary debt creation, promises significant benefits for the global economy. This document explores the implications and benefits of adopting a credit-to-credit monetary system, focusing on the role of Central URA and the potential impact on leading economies.
What is Central URA?
Central URA is a complementary and reserve money introduced by Resource Mobilization Inc. (RMI) on November 14, 2014. Initially designed for the assignment of RMI receivables, Central URA has evolved into a stable form of money backed by tangible assets. Unlike traditional fiat currencies, which operate on a debt-to-credit basis, Central URA is money backed by real assets, ensuring its value and stability.
Central URA Issuance and Management
Central URA is not issued like fiat currencies or cryptocurrencies. Instead, each unit of Central URA is apportioned as a private asset, ensuring inherent value and stability.
- Private Asset Apportionment: Central URA units are derived from RMI receivables, making each unit a share of a private asset. This ensures that every unit of Central URA is backed by real, tangible assets, providing a stable store of value.
- Non-Traditional Issuance: Unlike fiat currencies that can be printed at will or cryptocurrencies created digitally, Central URA’s issuance is tightly controlled and based on existing assets, preventing inflation and ensuring stability.
- Credit-to-Credit Nature: Central URA operates under a credit-to-credit system, ensuring no unit is issued without tangible backing, maintaining value and stability.
The Transition to a Credit-Based Monetary System
As governments around the world consider transitioning to a credit-to-credit monetary system, the following steps and impacts can be anticipated:
- Acquiring Central URA: Governments will use their fiat currencies, foreign reserves, and non-fiat assets to acquire Central URA. This acquisition will form the foundation of their new credit-based monetary system, with URA Central Corp facilitating these transactions.
- Leveraging Non-Fiat Reserve Assets: Central banks will leverage Central URA and their non-fiat reserve assets (e.g., gold, silver) to issue national currencies on a credit-to-credit basis.
- Issuing National Currency: Governments will issue national currencies backed by Central URA and other non-fiat reserve assets, moving away from debt-based systems to a more stable, asset-backed approach.
Benefits of a Credit-Based System
- Monetary Stability: Money backed by real assets ensures stable value, reducing the likelihood of economic crises driven by inflation or devaluation.
- Fiscal Responsibility: Governments will be incentivized to maintain responsible fiscal policies, as money issuance will be tied to tangible assets rather than arbitrary debt creation.
- Global Economic Integration: A universally adopted credit-to-credit system will facilitate smoother international trade, reduce currency exchange risks, and promote global economic integration.
Promoting Financial Inclusion
A credit-to-credit system will eliminate high-risk currencies, which often suffer from volatility and lack of confidence. This will promote financial inclusion by uplifting the trade capabilities of every country, especially those in the developing world. As Investopedia explains, “Fiat money is a government-issued currency that is not backed by a physical commodity, such as gold or silver, but rather by the government that issued it. The value of fiat money is derived from the relationship between supply and demand and the stability of the issuing government, rather than the worth of a commodity backing it.” With a credit-to-credit system, the value of money is backed by the amount of reserves available, not the stability of the issuing government, making every currency respected in the global arena of trade.
Case Studies: Leading Countries
- United States
- Current Situation: The US dollar is the primary global reserve currency, heavily reliant on debt issuance.
- Transition Impact: The US Federal Reserve will need to acquire Central URA and utilize its vast non-fiat reserve assets. This transition will stabilize the US dollar, reduce inflation, and lower national debt levels, enhancing investor confidence and economic growth.
- China
- Current Situation: The Chinese economy is rapidly growing but faces inflationary pressures and currency volatility.
- Transition Impact: China will use the yuan and its foreign reserves to acquire Central URA. The shift will stabilize the yuan, control inflation, and attract more international investment, bolstering economic growth and global trade dominance.
- Japan
- Current Situation: Japan struggles with high national debt and deflationary pressures.
- Transition Impact: By adopting Central URA, Japan will stabilize the yen and reduce national debt. The credit-to-credit system will promote economic stability, control deflation, and enhance investor confidence, driving economic recovery and growth.
- Germany
- Current Situation: Germany is an economic powerhouse within the Eurozone, facing challenges related to Eurozone debt.
- Transition Impact: Germany will transition to Central URA within the Eurozone framework, stabilizing the euro and reducing debt-related risks. This move will strengthen the Eurozone economy, promote fiscal discipline, and attract more investment.
- United Kingdom
- Current Situation: The UK economy is navigating post-Brexit challenges and currency volatility.
- Transition Impact: The Bank of England will acquire Central URA to stabilize the British pound. This transition will reduce currency volatility, enhance economic stability, and attract foreign investment, fostering economic growth in a post-Brexit environment.
Distribution Model
The transition to a credit-based monetary system involves a comprehensive distribution model:
- Central URA Acquisition: Each country will use its fiat currencies, foreign reserves, and non-fiat assets to acquire Central URA. URA Central Corp will establish a presence in each country, holding Central URA to facilitate these transactions.
- Leveraging Non-Fiat Assets: Central banks will combine Central URA and non-fiat reserve assets to back the issuance of their national currencies.
- Issuance of National Currency: Governments will issue their national currency backed by Central URA and non-fiat assets, transitioning to a credit-based system.
A New Era of Money Issuance
As countries transition to a credit-based issuance of their local currencies, the global economy will benefit from a more stable and resilient framework. This shift will promote sustainable development and economic integration, providing new opportunities for all countries, particularly those in the developing world.
Conclusion
The transition to a credit-to-credit monetary system, spearheaded by the adoption of Central URA and the utilization of non-fiat reserve assets, represents a monumental shift in the global financial landscape. This new system promises enhanced stability, reduced inflation, greater fiscal responsibility, and improved financial inclusion. By leveraging their existing fiat currencies and reserve assets to acquire Central URA, governments can stabilize their national currencies and foster economic growth.
The case studies of leading countries like the United States, China, Japan, Germany, and the United Kingdom illustrate the transformative potential of this system. As the world moves towards a credit-based issuance of local currencies, the global economy will benefit from a more stable and resilient framework, promoting sustainable development and economic integration. The elimination of high-risk currencies and the promotion of financial inclusion will uplift trade capabilities and provide new opportunities for all countries, particularly those in the developing world. The credit-to-credit monetary system, with Central URA at its core, offers a promising path forward for a more secure and prosperous global economy.