#  The Primary Certified Currency Framework

* Version of this text: 0.1.7

* License of this text: Creative Commons Attribution 4.0 International (CC-by 4.0)

* Author: Joseph Potvin <[email protected]>

* https://xalgorithms.redminepro.net/projects/certified-currency-working-group/wiki/Wiki

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## Summary

This framework enables participants along a supply chain to anchor contract worth (expressed with money through price) to an index that tracks the economic substrate, which is like the ocean floor. 

##  Purpose

When contracting parties establish their intentions in a signed document, they have a mutual interest in protecting their intended terms of agreement from extraneous drift and volatility as if floating on the ocean surface.[1] The Primary Certified Currency Framework is designed to provide a peer-to-peer contractual arrangement for participating businesses, their suppliers and their customers along a supply chain, in order to reduce risk caused by factors that degrade contractual intent and market integrity.

The Primary Certified Currency Framework:

* is operational with or without digital devices and Internet connectivity

* can be implemented with any paper or polymer currency or quasi-currency; 

* aligns with existing laws and business norms;

* employs well-established instruments of commerce;

* strengthens market freedom and competition; and,

* features uncomplicated accession, verification, operation, expansion and termination.

## Relationship

Each participant signs an “Accession Letter of Agreement” to a referenced version of the Primary Certified Currency Framework. This establishes a decentralized, distributed, peer-to-peer contractual relationship with all other Signatories of equivalent Accession Letters of Agreement that reference the same version of the Framework. The resulting contractual relationship among Signatories has no central or primary entity or individual. 

* Each Signatory is entitled to vote in elections for Steering Committee members. There shall be a minimum of three and a maximum of 9 active Steering Committee members.

* The Steering Committee has enforceable authority ONLY within the contractual and operational scope of the version of the Primary Certified Currency Framework that is referenced in the active Accession Letters.

* Steering Committee decisions are determined by "working consensus" (i.e. vote results may include "accepted" or "abstained", but none are "opposed"). In cases where a working consensus cannot be reached, the Signatories convene and provide delegates to a meeting (in-person or online) to discuss and resolve the matter. 

* The Steering Committee may request that one or more individuals serve as ‘Coordinator(s)’. This role carries no enforceable management authority over the Signatories, or their assets.  

The Primary Certified Currency Framework describes a non-restrictive, non-exclusive arrangement: 

* An Accession Letter to the Primary Certified Currency Framework does not restrict the Signatory, their companies or partners or clients or relatives from offering or engaging similar services, or derivative service types, or supplementary services under other titles outside the scope of this agreement. However the name "Primary Certified Currency” is reserved for reference to successive versions of this Framework and its implementations.

* Participation in a Primary Certified Currency Framework contract does not impinge on the prerogatives or responsibilities of any Signatory in relation to any other formal or informal contract or process. 

* No Accession Letter to the Primary Certified Currency Framework restricts extension of the agreement to additional participants, however with a written explanation the Steering Committee may decline or terminate any Accession Letter and therefore return the stored currency to that Signatory. 

* Other than within the contractual terms of the Accession Letter of Agreement, no Signatory acquires any liability or authority in relation to any other Signatory of another Accession Letter to the Primary Certified Currency Framework. 

In exchange for the benefits that participation in the Primary Certified Currency Framework, the Signatory agrees to the user fees established by the Steering Committee. 

##  Warehousing

The Steering Committee determines and oversees implementations of the security model, operations model, user fee structure, audit model, and maximum amount of risk tolerance for storing cash in Primary Certified Currency Warehouses.

* Signatories may store paper or polymer currency in denominations specified by the Steering Committee (e.g. $10 bills; $20 bills; $50 bills; $100 bills). If a jurisdiction terminates the use of cash, other types of controlled paper or polymer instruments with verifiable unique serial numbers will suffice (e.g. an agreed selection of gift certificates).[2]

* Each paper or polymer currency bill physically stored in a Primary Certified Currency Warehouse is owned by a Signatory to the Primary Certified Currency Framework, not by the warehouse operator. For the Signatory the bill is deemed to be “restricted cash” accounted for as a “non-current asset”. This cash stock MUST NOT mingle and MUST NOT be leveraged by or for operational requirements of the warehouse.

* The Steering Committee is accountable to ensure a fair and competitive market for independent operators of Primary Certified Currency Warehouses, through licensing, franchising or other arrangements determined by the Steering Committee. 

* Storage service fees are administered in relation to audited operational costs that are reported to all Signatories, without linkage to the worth or ownership profile of the stored currency bills. 

* Each warehouse operates a currency sorting method with serial number recognition, counterfeit detection, and multi-currency capability (example: https://financialequipmentcompany.com/product/gd-bps-c4-15a-currency-sorter-with-air-assist/). 

* Primary Certified Currency Warehouses accept ONLY paper or polymer bills that meet at least the quality standard PMG 65 EPG (Paper Money Guaranty / Exceptional Paper Quality; https://www.pmgnotes.com/about/about-pmg). 

* The Operator of a Primary Certified Currency Warehouse stores physical paper and polymer currency bills in the alphanumeric order of their serial numbers, and provides support for prompt and easy on-site inspection by authorized personnel. 

* Any Signatory to the Primary Certified Currency Framework, and any jurisdictional regulator, may send a notary, accountant or lawyer to verify the physical existence of specific bill(s), identified by their serial number(s) which they attest are owned by their client(s) in the Primary Certified Currency Warehouse, without appointment but with the requirement for recognized credentials, at any time during regular business hours customary within the municipality where the warehouse is situated. 

##   Certification

When a Signatory to the Primary Certified Currency Framework places a paper or polymer currency bill for storage into a Primary Certified Currency Warehouse, the Operator of the warehouse immediately: 

* Issues to the owner an electronic Primary Certified Currency Warehouse Receipt with the serial number of the deposited paper or polymer currency bill, along with the identity and contact details of the current owner of the stored bill; and,

* Updates the Primary Certified Currency Registry which relates the serial number of the deposited paper or polymer currency bill to the identity and contact details of the current owner of the stored bill. Any Signatory to the Primary Certified Currency Framework, and any jurisdictional regulator, may have a notary, accountant or lawyer to verify ownership in this decentralized distributed registry.

Except as specified in a “Variance to the Primary Certified Currency Framework” documented and signed by the Steering Committee, and promptly posted online (e.g. via the Steering Committee’s official Web site and messaging networks):

* Each Primary Certified Currency Warehouse Receipt shall conform with:

** The UNCITRAL Model Law on Warehouse Receipts (MLWR), or if that is not yet published, then it shall confirm with: the most recent UNIDROIT recommendations for the MLWR (2022) https://www.unidroit.org/wp-content/uploads/2022/03/Study-LXXXIII-W.G.4-Doc.-3-Preliminary-Draft-Model-Law.pdf 

https://www.unidroit.org/work-in-progress/model-law-on-warehouse-receipts/ 

** The most recent UNCITRAL Model Law on Electronic Transferable Records (MLETR) https://uncitral.un.org/en/texts/ecommerce/modellaw/electronic_transferable_records.

* The Primary Certified Currency Ownership Registry shall conform with the UNIDROIT Guide on Best Practices for Electronic Collateral Registries (2021) https://ctcap.org/wp-content/uploads/2021/09/BPER-Guide-9-September-Web-Copy.pdf. 

## Payment

At any time the transfer of ownership of Primary Certified Currency is accomplished with the re-assignment of a warehouse receipt, and a registry update, but with no movement of the securely-stored paper or polymer bills.

A Signatory of an Accession Letter to the Primary Certified Currency Framework who owns a paper or polymer currency bill stored in a Primary Certified Currency Warehouse may transfer ownership to any other Signatory, by completing both of the following two actions: 

* Assign and give full possession of the Primary Certified Currency Warehouse Receipt with the particular serial number to the other Signatory of the same or a more recent version of the framework. The Warehouse Receipt itself must be updated with the identity and contact details of the new owner of the paper or polymer currency bill.

* Validate that the Primary Certified Currency Registry is also updated with the identity and contact details of the new owner of the corresponding currency bill. 

While respecting the privacy and confidentiality of the parties, every apparent ownership discrepancy that arises between a Primary Certified Currency Warehouse Receipt and the Primary Certified Currency Registry shall be:

* Immediately documented for all Signatories via the Steering Committee’s official Web site and messaging networks; and,

* Promptly resolved under the accountability and oversight of the Steering Committee.

* Reviewed as part of regular quarterly audits, ‘arms length’ from the Steering Committee.

##  Worth

The network of Primary Certified Currency Warehouses maintains a purposeful *notaphily* collection of conventional currency bills that are distinguished from uncertified bills by an ownership registry, and a method for each owner to anchor the face value of their bills to an index of worth.[3] 

When contract prices and payments are specified for ‘Primary Certified Currency’, this signifies that the Parties intend to hold the tangible worth of their agreements stable relative to their stated index. This stability is meaningful ONLY for the currency bills anchored to the same index of worth. Pricing and payment in the Primary Certified Currency is of limited effect during start-up with few users, however it is subject to a strong ‘network effect’: It should become much more useful as adoption incrementally expands, such as among buyers and sellers along a supply chain. 

It is the prerogative of each Signatory to determine which index aligns most closely with their own approach to anchoring the worth of their contract. Following is an optional shortlist of indices: 

* Inflation-adjusted global stock market capitalization;

* Global weighted producer prices;

* Global primary commodity inventories index;

* Economic productive capacity index;

* Ecological productive capacity index.

### Inflation-adjusted global stock market capitalization 

Two indices in this category track total investment in publicly-traded companies on the world’s regulated stock exchanges. To remove inflationary drift from each index, the totals are adjusted with a global weighted producer price index (see below). 

**World Federation of Exchanges: Total Equity Market** - Capital raised by already listed companies (Total) https://www.world-exchanges.org/home/index.php/statistics, adjusted for the USD$ Produce Price Index using methodologically-consistent 1980-based data from John Williams’ “ShadowStats” http://www.shadowstats.com/alternate_data/inflation-charts 

**S&P Global 1200** – This index captures approximately 70% of global stock market capitalization, with data developed from the S&P 500® (US), S&P Europe 350, S&P TOPIX 150 (Japan), S&P/TSX 60 (Canada), S&P/ASX All Australian 50, S&P Asia 50 and S&P Latin America 40.” https://www.spglobal.com/spdji/en/indices/equity/sp-global-1200/#overview 

### Global weighted producer prices

This index provides a global average ‘Producer Price Index’ (PPI) based on the national PPI as reported by countries using their distinct methodologies, weighted by each country’s ‘Depletion-Adjusted Net National Income’. This is calculated by subtracting from Gross National Income (a) the consumption of fixed capital (‘net’) and (b) the depletion of natural resources (‘depletion-adjusted’).

https://www.economy.com/indicators/producer-price-index-ppi

https://data.worldbank.org/indicator/NY.ADJ.NNTY.CD

https://databank.worldbank.org/metadataglossary/world-development-indicators/series/NY.ADJ.NNTY.PC.KD 

https://www.wavespartnership.org/sites/waves/files/images/Constructing%20Adjusted%20National%20Income.pdf 

### Global primary commodity inventories

**S&P GSCI Equal Weight Select Index** This index is chosen to approximate, with decentralized commodity warehouses, the general mechanism for commodity reserve currencies for centralized warehouses that has been described at various times by Ben Graham, Jan Goudriaan, Nicholas Kaldor, Jan Tinbergen, Frederick Hayek, John Maynard Keynes and Jean de Largentaye.

https://www.spglobal.com/spdji/en/indices/commodities/sp-gsci-equal-weight-select/

### Economic productive capacity

**UNCTAD Productive Capacity Index.** This composite index tracks a set of “productive resources, entrepreneurial capabilities and production linkages, which together determine the capacity of a country to produce goods and services”

https://unctadstat.unctad.org/EN/Pci.html

###  Ecological productive capacity

This composite index tracks standard deviations of a limited selection of pivotal ecological variables based upon current satellite data relative to historical trends and cycles.

**Normalized Difference Vegetation Index (NDVI)**

Standard deviations during highest three months each year, i.e. peak vegetation season

https://earthobservatory.nasa.gov/features/MeasuringVegetation/measuring_vegetation_1.php

https://www.esa.int/SPECIALS/Eduspace_Global_EN/SEMC6FNW91H_0.html

**Soil Moisture Active Passive Index (SMAP)**

Standard deviations during three month peak vegetation season plus one month before and after 

https://www.nasa.gov/smap

Data Sources: 

https://landsat.gsfc.nasa.gov/data/   

https://sentinel.esa.int/web/sentinel/home 

Background: https://www.spiedigitallibrary.org/journals/SPIE-Reviews/volume-2/issue-1/028001/Review-and-evaluation-of-remote-sensing-methods-for-soil-moisture/10.1117/1.3534910.full?SSO=1 

## Certified Currency Working Group

Participants are invited to share models, empirical analyses and viewpoints through the Certified Currency Working Group:

* https://xalgorithms.redminepro.net/projects/certified-currency-working-group

* https://gitlab.com/xalgorithms-alliance/working-group-economic-petri-dish 

______________

Notes: 

[1] The Principles of International Commercial Contracts are published by the International Institute for the Unification of Private Law / L'Institut international pour l'unification du droit privé (UNIDROIT). Article 4.1 (Intention of the parties) states that "(1) A contract shall be interpreted according to the common intention of the parties. (2) If such an intention cannot be established, the contract shall be interpreted according to the meaning that reasonable persons of the same kind as the parties would give to it in the same circumstances."  An example of extraneous drift and volatility is the dramatic increase in farm machinery prices since 2020, which undermines agricultural supply contracts and market integrity:

https://fred.stlouisfed.org/series/PCU333111333111 

https://fred.stlouisfed.org/series/PCU333111333111C 

[2] Gift certificates are considered by governments to be a form of money. For example in Canada: "Legislative reference: Section 181.2 of the Excise Tax Act (''ETA'') 181.2 Gift certificates — For the purposes of this Part, the issuance or sale of a gift certificate for consideration shall be deemed not to be a supply and, when given as consideration for a supply of property or a service, the gift certificate shall be deemed to be money." https://www.canada.ca/en/revenue-agency/services/forms-publications/publications/p-202/gift-certificates.html 

[3] Article 5.1.7 (Comment 4) of the UNIDROIT Principles of International Commercial Contracts states: "In some situations the price is to be fixed by reference to external factors, typically a published index, or quotations on a commodity exchange”.  

______________

##  Template for Accession Letters of Agreement to the Primary Certified Currency Framework

[ _This template text constitutes an integral part of the Primary Certified Currency Framework. Please do not include this note in an Accession Letter of Agreement._ ]

*Accession Letter of Agreement* 

*Between* 

XXXXXXXXX 

*and* 

*All Other Signatories of Accession Letters of Agreement to the Primary Certified Currency Framework*

This Agreement applies to +Primary Certified Currency Framework, Version No. 0.1.5+ 

###  Mutual Agreement

1. The undersigned: 

* Attests to holding the prerogative to enter into agreements or contracts; 

* Has reviewed and understood the above-noted version of the "Primary Certified Currency Framework

2. The undersigned acknowledges mutual dependencies among all Signatories of Accession Letters to the Primary Certified Currency Framework, and commits to the following terms regarding participation and termination: 

(a) The undersigned's participation in the Primary Certified Currency Framework can be accepted as well as terminated by a working consensus vote amongst all other current Signatories. For an acceptance and termination vote to apply, it must be "agreed to" or "abstained from" by all other current members, and not "opposed" by any. Direct termination by the Steering Committee of an existing Accession Letter of Agreement requires at least 3 months advance written notice from (or on behalf) of the Steering Committee, but this can be overturned by a working consensus vote amongst all other current Signatories besides the Signatory at issue an the Steering Committee members. 

(b) The undersigned will provide at least 30 days written notice to the Primary Certified Currency Steering Committee before terminating their Accession Letter.

(c) Upon termination, any contractual obligations that the Signatories have autonomously undertaken in relation to the present Framework will be concluded as early as deemed practicable, in communication with the Steering Committee. 

(d) The Primary Certified Currency Framework is in effect with a minimum of two active Accession Letters of Agreement (including post-notification periods). 

###  asdf

This Accession Letter of Agreement expresses the intentions of the Undersigned on the date of the most recent update.. 

Signatory's Name: XXXXXX 

Organization Name (if relevant): XXXXXX 

Municipal Address: 

 XXXXXX 

 XXXXXX 

 XXXXXX 

Mobile Phone: XXXXXX 

Email: XXXXXX 

+The following fields are to be completed ONLY by a person authorized by the Primary Certified Currency Steering Committee.+ 

The Undersigned attests that the Primary Certified Currency Steering Committee has, through a "working consensus" vote as defined in the Framework, recognizes this Accession Letter of Agreement. 

Authorized Representative's Name: 

Date:  XXXXXX

Mobile Phone: XXXXXX 

Email: XXXXXX