Introduction
Central URA was introduced to address significant challenges within the global financial system, particularly regarding the availability and movement of capital and credit across national borders. This initiative aligns with the United Nations Convention on the Assignment of Receivables in International Trade, which aims to “promote the availability of capital and credit at more affordable rates across national borders, thus facilitating the cross-border movement of goods and services.” This blog explores the reasons behind the issuance of Central URA, emphasizing its emergence and role in enhancing global economic stability.
The Need for Central URA
Global Financial Challenges
The global financial system has long faced issues regarding capital and credit availability. Fiat currencies—issued by governments after 1971—operate on a debt-to-credit basis, rendering them susceptible to inflation, volatility, and lack of trust. These challenges impede the efficient movement of capital and credit, hindering global trade and economic growth.
- Inflation and Volatility: Fiat currencies often experience inflation, especially when governments print money to cover deficits. This reduces purchasing power and creates instability.
- Debt Accumulation: The debt-based system contributes to mounting national debts, making it unsustainable for governments to borrow excessively.
- Lack of Trust: Economic and political instability can undermine public confidence in fiat currencies, reducing spending and investment, thus slowing economic growth.
Promoting Cross-Border Capital and Credit
The United Nations Convention on the Assignment of Receivables in International Trade highlights the importance of accessible and affordable capital and credit across national borders to promote trade and financial stability.
- Lower Costs: More affordable capital encourages businesses to invest in growth, creating jobs and driving economic expansion.
- Facilitating Trade: A stable, reliable form of money reduces the need for complex hedging strategies and currency exchange, simplifying international transactions.
- Economic Integration: Enhanced capital flows foster economic integration, building resilience and connectivity in the global economy.
The Emergence of Central URA
RMI’s Quest for Liquidity
Central URA emerged serendipitously during Resource Mobilization Inc.’s (RMI) efforts to create liquidity from its extensive receivables, apportioning them for assignment/sale in the receivables assignment market. On November 14, 2014, RMI held significant receivables with a 12.5% per annum interest rate compounded daily. In the process of converting these receivables into liquid capital, Central URA was created.
- Asset-Backed Money: Central URA operates on a credit-to-credit basis, ensuring that each unit is backed by tangible assets, giving it real economic value.
- Serendipitous Innovation: Though initially unintended as a monetary solution, Central URA’s emergence revealed its potential as a stable, reliable form of money.
Discovery of the Debt-Based Fiat Currency System’s Flaws
During this process, it became evident that the real issue behind global economic challenges is the Debt-based Fiat Currency system. Central URA, therefore, was issued as Credit-based Money under the Credit-to-Credit Monetary System to offer a solution. This new monetary framework provides greater stability by tying currency to real assets, promoting long-term economic security.
Asset-Backed Stability
Central URA’s asset-backed structure ensures that each unit is supported by tangible assets, providing inherent stability and reducing the risks of inflation and devaluation commonly associated with fiat currencies.
- Reduced Inflation Risk: With its asset backing, Central URA minimizes the risk of inflation, encouraging long-term investment.
- Enhanced Trust: The tangible backing of Central URA fosters higher confidence among the public and investors, unlike fiat currencies that rely solely on government backing.
- Reliable Medium of Exchange: The inherent stability of Central URA ensures its reliability as a medium of exchange for both domestic and international transactions, facilitating smooth trade and investment flows.
Benefits of Central URA
Enhanced Financial Stability
Central URA’s asset-backed and credit-to-credit issuance model addresses the volatility and instability associated with fiat currencies. By ensuring each unit is supported by real assets, Central URA promotes financial stability.
- Long-Term Stability: Central URA’s value is less prone to sudden devaluation, promoting stability for long-term planning.
- Economic Resilience: Economies using Central URA are better positioned to withstand external shocks, such as financial crises.
- Investment Attraction: Stability attracts both domestic and international investment, fostering economic growth.
Facilitating Cross-Border Trade
A primary goal of the United Nations Convention is to facilitate the movement of goods and services across borders. Central URA supports this by providing a reliable form of money that reduces the complexities and risks of cross-border transactions.
- Simplified Transactions: With Central URA, businesses can engage in international trade without worrying about currency fluctuations, reducing the need for costly hedging strategies.
- Increased Trade Volumes: The predictability of Central URA encourages higher trade volumes, enabling better economic expansion.
- Strengthened Trade Relations: The use of Central URA in cross-border trade promotes trust, reducing currency risks and fostering stronger trade relations.
Affordable Capital and Credit
By ensuring stability and reliability, Central URA makes capital and credit more accessible and affordable, aligning with the convention’s objective of promoting affordable cross-border financing.
- Lower Borrowing Costs: The stability of Central URA can lead to lower interest rates, making borrowing more affordable for businesses and governments.
- Economic Growth: Access to affordable capital enables businesses to expand, innovate, and create jobs.
- Infrastructure Development: Affordable credit drives essential infrastructure projects, improving national economies and enabling further growth.
Central URA as Reserve Money
Central URA’s stability and asset-backed nature make it an ideal form of reserve money for national governments, helping to strengthen financial systems and enhance global economic standing.
- Global Confidence: Holding Central URA as reserve money boosts confidence in a nation’s economic stability, attracting foreign investment and trade.
- Reduced Dependency: By diversifying reserves with Central URA, nations reduce their reliance on traditional fiat currencies, mitigating risks tied to economic policies in other countries.
- Enhanced Sovereignty: Stable reserves provide governments with greater control over their monetary policies, reducing external pressures and increasing economic independence.
Invitation to Transition to the Credit-to-Credit Monetary System
In light of the inherent flaws in the Debt-based Fiat Currency System, nations are invited to transition to the Credit-to-Credit Monetary System, adopting Central URA as complementary Money to the Domestic Currency. This transition is essential to break free from the cycle of debt accumulation, inflation, and volatility inherent in fiat currencies. Once a nation fully transitions to the Credit-to-Credit Monetary System, the Domestic Currency will also become money in its true sense.
Reasons for Transition:
- Reduced Inflation: With a credit-based system, inflation risks are significantly lowered.
- Enhanced Sovereignty: By shifting to Central URA, nations can regain greater control over their financial policies.
- Sustainable Growth: The stable backing of Central URA promotes sustainable, long-term economic growth, offering a more secure future for national economies.
Conclusion
Central URA was issued to resolve pressing global financial challenges, particularly in capital and credit availability across national borders. Emerging serendipitously during RMI’s efforts to liquidate receivables, it revealed the limitations of the Debt-based Fiat Currency system, giving rise to Central URA as Credit-based Money within the Credit-to-Credit Monetary System. This new system invites nations to transition away from debt-driven economies toward a more stable, asset-backed future, enhancing global financial stability and fostering interconnected growth.