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Joseph Potvin, 08/23/2022 04:04 PM

Primary Commodity Producers’ (PCP) Certified Currency Specification

About this Document

This reference text is maintained under formal revision control by and on behalf of Signatories of Accession Letters to the PCP Certified Currency Specification. ("Version 2.5.4" would represent: Version 2, Sub-Version 5, Minor Update 4) Any new thread and/or version of this text is deemed to be active only to the extent that each Signatory to an Accession Letter updates their Letter with a new thread and/or version number of the PCP Certified Currency Specification.

Purpose

After contracting parties establish their intentions and sign a contract, they have a mutual interest in protecting their agreement from externally-imposed changes. The PCP Certified Currency Specification provides participating businesses, their suppliers and their customers a voluntary contractual arrangement to manage risk from pricing and payment inconsistency due to various factors that could degrade contractual intent and market integrity.

The PCP Certified Currency Specification outlines a simple method for resilient term contract pricing and payment that:

  • can be used with any existing paper or polymer currency;
  • aligns with existing laws and business norms;
  • makes use of long-established instruments of commerce; and,
  • features uncomplicated accession, verification, operation, expansion and termination.

The Principles of International Commercial Contracts are published by 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."

Relationship

The PCP Certified Currency Specification describes a decentralized distributed contractual relationship among Signatories:

  • Each participant signs an “Accession Letter of Agreement” to a referenced version of the PCP Certified Currency Specification in order to establish a peer-to-peer contractual relationship with all other Signatories of equivalent Accession Letters of Agreement referencing the same version of the Specification. 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 active Steering Committee members.
  • ONLY within the contractual and operational scope of the version of the PCP Certified Currency Specification referenced in the Signatory’s current Accession Letter, the Steering Committee has enforceable authority.
  • 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 PCP Certified Currency Specification outlines a non-restrictive, and non-exclusive arrangement:

  • An Accession Letter to the PCP Certified Currency Specification 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. Only the names "Currency Certification for Term Contracts” and “ERA Certified Currency Specification" are reserved for reference to this specification and its implementations.
  • Participation in a group of PCP Certified Currency does not impinge on the prerogatives or responsibilities of any Signatory to pursue any other formal or informal contract or process.
  • No Accession Letter to the PCP Certified Currency Specification restricts extension of the agreement to additional participants, however with a written explanation, the Steering Committee may decline or terminate any Accession Letter.
  • No Signatory of an Accession Letter to the PCP Certified Currency Specification acquires any liability or authority in relation to any other Signatory of another Accession Letter to the PCP Certified Currency Specification.

The PCP Certified Currency Method for Pricing and Payments Resilience

PCP Certified Currency Warehouses

  • The PCP Certified Currency Steering Committee determines and arranges the security model, operations model, user fee structure, audit model, and maximum amount of risk tolerance for storing cash in the PCP Certified Currency Warehouses.
  • Signatories store government-issued paper or polymer currency in denominations specified by the Steering Committee (e.g. $10 bills; $20 bills; $50 bills; $100 bills) in PCP Certified Currency Cash Warehouses.
  • PCP Certified Currency Warehouses accept ONLY bills that meet at least the quality standard PMG 65 EPG (Paper Money Guaranty / Exceptional Paper Quality; https://www.pmgnotes.com/about/about-pmg). This ensure that automated management systems may be used when required.
  • The Operator of an PCP Certified Currency Warehouse stores its holdings of paper or polymer bills in the alphanumeric order of their serial numbers, and provides support for prompt and easy on-site inspection.
  • Any Signatory to the PCP Certified Currency Specification, and any jurisdictional regulator, may send a notary, accountant or lawyer to verify the physical existence of any particular bill(s) in the PCP Certified Currency warehouse, without appointment but with proven credentials, at any time during regular business hours of the municipality where the warehouse if located.
  • All bills stored in an PCP Certified Currency Warehouse are “Restricted Cash”. ** https://www.wallstreetmojo.com/restricted-cash/ ** https://simplestudies.com/what-is-restricted-cash.html

Certification of Currency Existence

Except as specified in Variances to the PCP Certified Currency Specification, documented by the Steering Committee and provided to Signatories:

When a Signatory to the PCP Certified Currency Specification places a paper or polymer currency bill for storage into a PCP Certified Currency Warehouse, the Operator of the warehouse immediately:
** Issues to the owner a paper and/or electronic PCP Certified Currency Warehouse Receipt that records the serial number of the deposited paper or polymer currency bill, with the identity and contact details of the current owner of the stored bill.
** Updates the PCP 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.

At any time, for any reason, the owner of PCP Certified Currency may transfer ownership of any paper or polymer currency bill stored in a PCP Certified Currency Warehouse, by completing the following two actions:

  • Assign and give physical possession of the PCP Certified Currency Warehouse Receipt to the new owner who must also be a Signatory of an Accession Letter to the PCP Certified Currency Specification;
  • Validate that the PCP Certified Currency Registry is updated with the identity and contact details of the new owner of the particular bill stored in the PCP Certified Currency Warehouse.

Any data discrepancy between an PCP Certified Currency Warehouse Receipt and the PCP Certified Currency Registry shall be immediately documented for all Signatories, and promptly resolved by the Steering Committee.

Certification of Currency Worth

The PCP Certified Currency Specification describes a method to help manage risk from pricing and payment factors that erode contractual intent and market integrity.

When Signatories to the PCP Certified Currency Specification express contract price and payment amounts in any PCP Certified Currency, this signifies that the intended real worth expressed though price shall be dynamically anchored to the PCP Index.

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”.

Primary Commodity Producers’ Index, Version 0.1.0

An experimental version 0.1.0 of the PCP Index begins with the following factors that affect Western Canadian grain production:

  • Cash Prices for Wheat, Oat, Barley, Rye, Flax, Canola, Soy, Pea, Corn, Sunflower, Rice

Sources: https://www.grainscanada.gc.ca/en/grain-research/statistics/grain-statistics-weekly/

Background: https://www.pdqinfo.ca/about/procedures

  • Prices for Farm Machinery

Sources:
https://fred.stlouisfed.org/series/PCU333111333111
https://fred.stlouisfed.org/series/PCU333111333111C

  • Soil Moisture (Actual Variance from Model Optimal)

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

Effective Dates of Accession Letters of Agreement

This PCP Certified Currency Specification represents the understanding of each Signatory as of the date of their respective Accession Letter of Agreement, specifying a particular version number.

In recognition of the mutual dependencies of this initiative, each Signatory agrees to give 90 days written notice to the PCP Certified Currency Steering Committee of their intention to withdraw. Any contractual obligations that the Signatories have autonomously undertaken in relation to the present Specification will be concluded as early as deemed practicable, in communication with the Steering Committee.

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

Template for Accession Letters of Agreement to the PCP Certified Currency Specification

[ Note: This template text constitutes an integral part of the PCP Certified Currency Specification. 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 PCP Certified Currency Specification

This Agreement applies to +PCP Certified Currency Specification, Version No. 0.1.0+

MUTUAL AGREEMENT

In exchange for the benefits that participation in the PCP Certified Currency Specification, the Signatory agrees to the user fees established by the Steering Commitee.

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

  1. The undersigned's participation in the PCP Certified Currency Specification 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. 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.

  2. The undersigned will provide at least 30 days notice month written notice to the PCP Certified Currency Steering Committee before terminating their Accession Letter..
    +The undersigned+:

  3. Attests to holding the prerogative to enter into agreements or contracts;

  4. Has reviewed and understood the above-noted version of the "PCP Certified Currency Specification

  5. Has determined that use of the systems, services and/or infrastructure of the PCP Certified Currency Specification enables their team or community to accomplish their objectives more effectively, at lower cost and/or with stronger risk management, than is otherwise currently feasible.

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 PCP Certified Currency Steering Committee.+

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

Authorized Representative's Name:
Date: XXXXXX
Mobile Phone: XXXXXX
Email: XXXXXX

Updated by Joseph Potvin almost 4 years ago · 2 revisions