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    R. Pringle's Ikon

    The Chairman and Founder of Central Banking Journal, Robert Pringle, has described a possible monetary reference unit of account as a constant fraction of the total of tradable equity claims on real assets in the global economy:

    A Working Reference Implementation of the Ikon

    In order to advance and assess the practical potential of the Ikon concept, The Opman Company has initiated and is co-managing this free/libre/open source project under the GNU AGPL and GNU FDL licenses. The objective of this project is to quickly create a working instance of Pringle's system through the efforts of a small team of economists, systems analysts and software developers, to serve then as a working platform for iterative testing and refinement. All source code will be available via github (link coming shortly), while project community management and documentation are maintained at ProjectManagementHotel.com.

    Currently this work is undertaken pro bono by The Opman Company and the participating developers named at the top-right of this page, as a limited investment. Our income-earning time and effort is currently based on other projects and clients, all of which are interesting and very useful, but none anywhere near as important as contributing in a practical way, if we can, to a more coherent global monetary systems design. By initiating this functional reference implementation, we ask that interested institutions and individuals consider contributing financially to this project, which will enabling us to set aside some of our other commitments in favour of this project. To participate in or support this effort, please contact Joseph Potvin at jpotvin*opman.ca (replace the * with @).

    A Summary of R. Pringle's Ikon Standard Unit of Account

    Robert Pringle defines the Ikon as a constant fraction of the total of tradable equity claims on real assets in the global economy, a globally diversified basket of shares selected to represent ownership of the world's total invested assets. An Ikon would be an established fraction of the global equity market portfolio, so that its value would increase/decrease with growth/decline in economic activity. For example, one Ikon could initially be calibrated as, say, one trillionth of the outstanding value of all equity shares traded on all the world's recognized stock markets.

    In his proposal, currencies in circulation today would be convertible into Ikon units, and Ikon units will be convertible into bundles of shares, thereby providing money an anchor to the real economy that can be understood and monitored. Each currency would continue to circulate, but they would be defined to be constant in term of the Ikon's diversified portfolio of claims on real assets. In practice, it is suggested that public and business trust in the Ikon's maintenance monetary value would result in low demand for actual convertibility to shares.

    These fixed values would be actively maintained by a currency board that operates much like the Hong Kong Monetary Authority which buys and sells HKD against USD within narrow margins. In this case, a board hosted by IMF or BIS would regulate the supply of Ikons by passively selling/redeeming shares on demand.

    Participating central banks would hold Ikon accounts with the currency board which would sell/redeem Ikons for eligible assets such as government debt securities at the market value of the Ikon. Each central bank would remain free to suspend their membership in the Ikon system, and while outside they may revise their exchange rate relative to the Ikon and all other currencies.

    Pringle outlines potential transition to an Ikon Monetary Standard Unit of Account in the following steps:

    1. In collaboration with BIS and the IMF participating central banks would manage their exchange rates into increasingly narrow ranges to first establish stability of expectations amongst households, companies, financial institutions and governments.
    2. Participating central banks agree on a common temporary anchor for their currencies, which could take the form of targeting a common price measure or basket of commodities, or even gold alone.
    3. Bank assets within all currency zones are converted into (redefined as) investments in securities held by mutual funds, i.e. as direct investments in the real economy. Liabilities become shares, wherein risks are borne by the investor (depositor). Since bank deposits would now be claims on the portfolio of assets held by each bank, depositors would earn a return tied to the performance of the portfolio. Making payments from such an account would require the transfer of a varying amount of units, depending on the value of the fund at the time (as with money market funds).
    4. The temporary anchor is replaced by an agreement under an international treaty, which defines the Ikon's globally diversified basket of tradable equity claims on real assets in the recognized exchanges of the global economy, based upon existing information systems in place at each exchange. The treaty would include a comprehensive regulatory structure.
    5. Potentially, as part of the treaty, banks would simply be redefined as consultancies or marketing firms selling a diversity of mutual funds registered as Ikon (real property funds; private equity funds; commercial paper funds; residual mortgage funds; small and medium enterprise funds; inflation-indexed funds). Banks would compete with each other, and depositors select the portfolios in which they wish to invest, from the range of options. Managers of these funds would be compensated with a percentage of the fund's assets. Brokers would not be able to take positions as principals in the trading activities. Cash would be accessed through cash mutual funds that only hold cash assets -- in effect, balances at the central bank.

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