Orion
This Idea is for anyone in the World to Create.
tl;dr: Orion is an Idea for a Smart Contract System that allows someone to send KYC/AML’d Digital Fiat into the Contract to be locked up, and then the contract gives equivalent Non-KYC/AML’d Digital Fiat back to the sender.
The original KYC/AML’d Digital Fiat can be recovered at any time by returning the Non-KYC/AML’d Digital Fiat to the Contract.
Here is what I saw recently when I was looking to open a new Bank Acct:
IMPORTANT INFORMATION ABOUT PROCEDURES FOR OPENING A NEW ACCOUNT
To help the government fight the funding of terrorism and money laundering activities, Federal law requires all financial institutions to obtain, verify and record information that identifies each person who opens an account.
What this means for you: When you open an account, we will ask for your name, address, date of birth and other information that will allow us to identify you. We may also ask to see your driver’s license or other identifying documents.
This is exactly what we will see when we try to exchange USD Physical Fiat for USD Digital Fiat at a Bank to put on our Digital eWallet. We will have to go through all of the KYC/AML stuff to link our eWallet’s Digital Fiat Crypto Address to our Identity (the same stuff we already go through to set up a USA Bank Acct).
This will lead to a Whitelist of Cryptocurrency addresses that USD Digital Fiat can be transferred between. This will allow the Bank and the Dept of the Treasury to make sure you can only send the Digital Fiat to KYC/AML’d persons (just like a normal bank account).
The Banks may even ask for your Exchange addresses and Hardware Wallet addresses as well. Because if those addresses are not on the whitelist then you won’t be able to send the USD Digital Fiat to them. The transfer will just say ‘invalid’ (just like trying to Wire/ACH dollars to someone who has not gone through the KYC/AML for their bank account- you won’t be able to!).
So something that I think is needed is a Smart Contract that can receive 1 KYC/AML’d USD Digital Fiat and spit out 1 Non-KYC/AML’d USD Digital Fiat. And we want this because it would allow people in the ‘Underserved’ Stablecoin use-case to be able to benefit from the ‘Stability’ and ‘Trust’ of Bank-Issued USD Digital Fiat. I don’t want to see those people go down in flames using trash like Basis or Havven or Terra.
The Non-KYC/AML’d USD Digital Fiat that pops out can always be traded for anything, as well as it can be redeemed for the KYC/AML’d USD Digital Fiat from the Smart Contract. It will act just like the KYC/AML’d USD Digital Fiat but WITHOUT the Address Whitelist.
If we have a way to lock-up USD Digital Fiat in a Smart Contract and spit out a synthetic version, we can solve the Underserved Stablecoin use-case.
This might seem easy now. The Gemini Dollar is kind of like Bank-Issued Digital Fiat, but it allows the GUSD to be sent to any Ethereum address. The KYC/AML is only enforced upon GUSD Creation/Destruction (aka USD Deposit/Withdrawal). I find that totally strange. A Regulated Digital Fiat product doesn’t check who you’re sending you Regulated Digital Dollars to? Seriously???
Don’t get used to it.
That’s not how the World is going to operate when Regulators catch up.
I don’t think Regulators know what’s going on right now. They’re still educating themselves on this new technology. It takes a lot of time to understand, and that’s OK.
With the current ‘Regulation’ of the GUSD, it can be sent to Terrorists/Money Launderers/Whoever with no KYC/AML checks. Once the Treasury Dept understands that, it will no longer happen.
And what’s going to happen is this Digital USD Fiat will be relegated to being sent only to Crypto addresses that have been KYC/AML’d on a Whitelist.
If a Person’s Crypto Address is not on the list: Too bad.
If an Exchange’s Crypto Address is not on the list: Too bad.
If a Hardware Wallet’s Crypto Address is not on the list: Too bad.
If those addresses are not on the list then the USD Digital Fiat will not be able to be sent to them (same as if they didn’t successfully complete KYC/AML for their USD Bank Acct).
This is how Digital USD Fiat will operate. Just like how Electronic USD (the money in our Bank Accts we can Wire/ACH to people) operates today.
So the above has taught us how P2P txfers will be restricted in the future with Regulated USD Digital Fiat.
I think the same will eventually happen on Exchanges.
You’ll need to be on the KYC/AML’d whitelist for HOLDING the USD Digital Fiat on an Exchange. (CASHING-OUT the USD Digital Fiat from an Exchange already requires KYC/AML).
KYC/AML just for Holding USD Digital Fiat on a Crypto Exchange is the New Idea here. On current exchanges people can trade with/hold Regulated USD Digital Fiat (TUSD, GUSD) even if they haven’t completed KYC/AML for their account. They only have to complete the KYC/AML if they want to cash-out to US Dollars.
But in the future, the US Treasury Dept will require that the Regulated USD Digital Fiat can only be Held by KYC/AML’d addresses on Centralized Exchanges (and if the Owner’s of the Centralized Exchanges don’t cooperate, then maybe INTERPOL can help talk some sense into them). This means people on Centralized Exchanges will all have to have their own KYC/AML’d USD Digital Fiat addresses to be able to hold/trade any of the associated pairings. If not, they won’t be able to touch it.
So these 2 new USD Digital Fiat Realizations (KYC/AML Whitelist for P2P Txfer + KYC/AML Whitelist for Holding on an Exchange) now makes Orion much more difficult.
How can Orion work if the Orion ETH Contract is not on the USD Digital Fiat KYC/AML’d Whitelist? Would people still be able to exchange/redeem with the contract? Is there a way around it? Is it even possible to create?
Nobody needs Orion now because the P2P Txfer + Exchange Holding Restrictions are not yet in place. But they will be here eventually. Or how else would the Treasury Dept successfully enforce USD sanctions against countries like Iran?
__________________________________________________________________
If you enjoyed this Track, please “CLAP” 50x below, and then SHARE it with One Hundred THOUSAND People.
Witness All of my Genius in the UNIVERSE’S FIRST Written Album:
The Official Guide to Stablecoins LP
__________________________________________________________________
