Project description

    Businesses involved in multi-year contracts in different economic zones typically hedge risk through various types of forward contracts, options and swaps. Essentially, the parties agree in the present about a mutually acceptable exhange rate in the future. When negotiating such agreements, the participants inevitably confront the need to make a prior judgement about what they believe would be a reasonable future scenario.

    This set of contract price benchmarks is being developed to supply information designed to improve the quality of judgement about reasonable future prices. It is an experimental unproven system.

    The purpose of this set of projects is to develop minimalist outlines of the conceptual and operational basics of each general value-in-exchange benchmark, and for each, to create functional proof-of-concept software under free/libre/open source licensing and methods that can be used, adapted and extended for scenario development.

    Why proof-of-concept software?

    All present-day payment systems and their supporting analytical systems are implemented in the form of computer programs, which occur as sets of instructions or statements written in specialized languages, and deployed in electronic devices. The devices are designed to draw upon these programs, locally or across networks, to structure the storage, retrieval and transformation of data to serve four economic functions: a unit of account, a medium of exchange, a standard of deferred payment, and a store of value.

    Effective demand for "Payment Systems Design"

    Five years ago the community of professionals working in and around banking, financial and related policy institutions seemed unprepared to discuss payment system architecture except in the historical context. Even today, rethinking payment system architecture from first principles is still largely ridiculed or self-censored.

    Now, the absurdity of this current state has opened many more minds in and around transaction, financial and policy institutions to put previously ridiculed payment system alternatives onto the agenda. Options that were solely the concern of specialists are now presented and discussed in public fora, debated in the general news media, and are overheard in discussions on public transit. Not since the 1930s and 40s has payment systems design been such a popular topic.

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