State Stable Crypto-Bridge (SSCB), v 0.1

«Whoever controls the spice, controls the universe».

Русскую версию можно прочитать здесь.

1. CBDC emission

The State Central Bank (CB) issues on a private blockchain (it is possible without it, in general, it’s up to the States’s discretion, but without it — it makes little sense) a national digital currency (the so-called Central Bank Digital Currency, CBDC) and maintains a system of accounts for individual and corporate CBDC holders (essentially — programmatically correlates with each other the state register of legal entities and individual entrepreneurs with the internal register of CBDC accounts).

2. Restrictions on holding CBDC

Opening CBDC accounts for individuals without the status of an individual entrepreneur, I believe, is not worth it at the first stage, since the crypto-economy is all about entrepreneurship. Such a restriction may solve the problem of fraud within the country — everyone in a row will not be “trading” through the pyramid schemes and scams of all sorts. You can establish here some kind of “accreditation” process through passing exams for adequacy and knowledge of the basics of modern economics and finance. Well, we need to let banks being busy with some work — not to expel them immediately from the market as an unnecessary atavism. And the reason is not at all in their owners and top managers — they will not become poor, but in the great amount of people who work in them.

3. SSC emission

The Central Bank issues on a public blockchain (do not go to a fortune teller, you need to start with Ethereum, otherwise — WTF?) a stable crypto-currency (the so-called stable coin, or for the purposes of this article — State Stable Coin or SSC) and secure it with 1:1 collateral in the national CBDC. This does not mean at all that CBDC is only used to provide a stable crypto-currency. Its turnover within the State — that’s policy of the Central Bank. Although in general, the scope of CBDC will remain the same as it is now for cashless payments; except that the money market infrastructure (payment system) will be simplified.

4. SSC emission size

The size of the SSC emission remains at the discretion of the Central Bank and depends on the needs of the market and on the monetary policy of the Central Bank. It is possible to open and close this “gateway” through additional SSC emissions depending on the volume of the national economy (the volume of domestic commodity and financial markets and the speed of their turnover), which is ready to accept new liquidity from the crypto-economy without an inflationary shock.

5. Bringing SSC to market

The Central Bank brings SSC to the market through (1) buying cryptocurrencies to form crypto-reserves and (2) through opening positions on decentralized crypto-exchanges (well, it is also possible to do it on centralized crypto-exchanges, but are they worth it?).

6. DApp

The Central Bank creates an interface (decentralized application) that allows you to correlate with each other (1) the state register of legal entities and individual entrepreneurs, (2) the internal register of CBDC accounts and (3) SSC wallets on public chains. An application that allows SSC holders to burn SSC and receive CBDC, which in the same application can be used for payments within the national «fiat» economics.

7. Entrancy tax

When SSC is burned, the amount of CBDC receivable is less by a percentage of the state tax (for the purposes of this article, the “entrancy tax” is accumulated in a separate fund managed by “some_state_agency_for_economic_development” or any transparent instrument of a kind from the public sector). This percentage is the only tax on the crypto (no problems with all sorts of old definitions and concepts there — simply, if you want to bring profit from the crypto into the national economy — pay a percentage of the transaction at the entrance and sleep peacefully ever after). The tax is calculated and withheld automatically and atomically. And yes, there is no need for a tax on mining (well, or at the very least, make a separate register — being just a status in the Dapp — miners who automatically transfer all profits through SSC to CBDC). Although it seems to me that this is superfluous — until there is a desire to establish a special tax rate for them.

8. Tax amount

The tax amount (percentage of the SSC burning transaction) increases depending on the number of burned SSCs (cumulative total, may be in general, or may be only within the financial year) — for example, it starts from 6% (for individual entrepreneurs) and rises either up to 13% (compared to personal income tax) or up to 20% (compared to corporate income tax) depending on the wallet status (personal account or DAO smart contract account).

9. DAO

Yes, as you already understood, this is also a way to legalize cash flows from the activities of the DAO. Although there are nuances here: a DAO can work in a crypto-economy without incorporation and limited liability privileges — anyway in this unincorporated scenario, DAO profits will be distributed to individual wallets at some point in time (which can later be used for SSC purchase and entering into the national economy through the DApp). On the assembly of this registry, perhaps, I can write a separate post.

10. Entry into the crypto

The reverse flow is formed by issuing SSC for those who transferred CBDC to the accounts of the Central Bank (he received them earlier — somehow — Oh, Central Bank moves in a mysterious way). Perhaps it makes sense in the future to clear the volume of this flow against tax liabilities at the exit from the crypto.

Final comments

This whole system is the State Stable Crypto-Bridge. Fully controlled by the Central Bank and regulated by it, taxable, clean, transparent, like my tears of joy at the sight of its simplicity and convenience. I suppose it is possible to allow some accredited players to issue industry stable currencies on public chains with automatic access to the Bridge, but here, in theory, the Central Bank employees will have to start studing the work of the EVM, and, OMG, to write smart contracts.

The circulation of cryptocurrencies on the market of private intellectual services can be allowed within the state, and the circulation of cryptocurrencies in commodity, securities and real estate markets and the like can be opened consistently through focused tokenization — controlled emission of industry stable currencies and other digital assets.

Synoptic — ex machina

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