Conference PaperPDF Available




Gold and silver have been money since the dawn of society. By the end of the 20th century, fiat money attempted to replace the gold standard with a fiat monetary system. More recently, since the beginning of the 21st century, cryptocurrencies in turn are aiming to replace the fiat system. Peer-to- peer encrypted networks have facilitated global transactions in ways never thought to be possible, and cryptocurrencies have become a popular investment option, however, not without risk. This report examines the new taxonomy of money, the current monetary landscape and how AgAu tokens are situated within it. Our report takes into account the analysis of multiple studies conducted by some of the most renowned names in the field of monetary policy, central banking and crypto- economics. Among other things, the report describes the many "pros" and "cons" of cryptocurrencies; discusses whether or not, they will be able to replace fiat money entirely, and outlines the differentiating factors between central banks issuing digital currencies, and AgAu tokens as a private form of money. Cryptocurrencies have been revolutionising digital trade for nearly a decade, first considered an underground payment system, and slowly gaining popularity. Initial Coin Offerings (ICOs) are disrupting the investment world and perhaps also emulating its deficiencies with pockets of irrational exuberance. Despite its imperfections, the idea of a decentralised banking system is a powerful one. One that aims to create an ecosystem with a very small barrier to entry and where free trade can flourish in a permission-less system.
by: Joe Thierry Arys Ruiz and Abdul-Hadi Bashir Subhia!
Copyright © 2018 TARCO International GmbH
Para Iris, con Amor.
Medium of Exchange""""""""""6!
Store of Value"""""""""""7!
Unit of Account"""""""""""8!
Early Stages in Crypto currencies" " """"""8!
Peer-to-Peer Lending Based on AgAu"""""""9!
Anonymity & Privacy""""""""""11!
Optimal Payment Solution"""""""""11!
Gold Bars / Coins""""""""""12!
PublicMinted Gold / Silver Coins""""""""13!
Hayek Bank"""""""""""14!
Hayek Banknotes / Tumin"""""""""15!
Standard Bank Deposits"""""""""16!
Fiat Currencies"""""""""""16!
Central Bank Deposit (CBD) / Universal Money / Vollgeld""""17!
Central Bank Deposit ( Gold Standard)"""""""18!
Central Bank Digital Currency (CBDC)"""""""19!
Wholesale Central Bank Cryptocurrencies """"""20!
Fedcoin Gold Standard ( Gold Backed CBDC)""""""21!
Inconvertible Deposits""""""""""22!
Banknote Gold Standard"""""""""22!
Gold Certificates """"""""""23!
Barter """"""""""""23!
Bitcoin Cryptocurrencies & Electronic P2P Cash Protocols""""24!
Gold and silver are money since the dawn of society. By the end of the 20th century, “fiat money”
currencies attempted to replace the gold standard by establishing a fiat monetary system. More
recently, since the beginning of the 21st century, cryptocurrencies in turn are aiming to replace the
fiat currency system. Peer-to-peer encrypted networks have facilitated global transactions in ways
never thought to be possible, and cryptocurrencies have become a popular investment option,
however, not without risk. !
This report examines the new taxonomy of money, the current monetary landscape and how AgAu
tokens are situated within it. Our report takes into account the analysis of multiple studies conducted
by some of the most renowned names in the field of monetary policy, central banking and crypto-
economics. Among other things, the report describes the many "pros" and "cons" of
cryptocurrencies; discusses whether or not, they will be able to replace fiat money entirely, and
outlines the dierentiating factors between central banks issuing digital currencies, and AgAu tokens
as a private form of money in the spirit of F.A. Hayek. !
Cryptocurrencies have been revolutionising digital trade for nearly a decade, first considered an
underground payment system, and slowly gaining popularity. Initial Coin Oerings (ICOs) are
disrupting the investment world and perhaps also emulating its deficiencies with pockets of irrational
Despite its imperfections, the idea of a decentralised banking system is a powerful one. One that
aims to create an ecosystem with a very small barrier to entry and where free trade can flourish in a
permission-less system.!
People have used gold in the region
of the Middle East since 6000 years
BC and in the Pre Colombian Era in
the Americas. Gold is considered as
most honest means of money ever
discovered, and an excellent value
keeper in times of crisis.
Silver, the second oldest known
precious metal, has been used by
humans for over 6 000 years. In the
antiquity silver came mostly from
India, Persia and Spain, and since the
discovery of the American continent
from the Americas.
The ancient Aztec glyph for gold - a
cross balanced by four small rings -
can be seen in the jade pendant with
a figure of the sun god Tonatiuh,
British Museum collections
According to Chapter IV of The Wealth of Nations by famous economist Adam Smith (1776), when
mankind began to organise into a civilised society, the aspect of trade quickly appeared. Soon,
civilisations started using a barter system in which they gave "value" to certain objects - they would
later trade for other objects considered of equal worth. With the discovery of gold (Au) and silver (Ag)
more than 3000 B.C, a new era of money began with a new value system consisting of the exchange
of tokens and later coins. Gold and its chemical property of immutability through time quickly
became the standard to store value.!
Later, when bank notes were invented, the notion of "intrinsic" value was replaced by an arbitrary
denomination on a cotton bill and the trust in certain governments, private counterparts and later
central banks. Since then, it seems no fiat currency could really maintain that trust intact over the
long term. By nature, the fiat money system has evolved into a large network of lending, credit and
fractional reserve banking. Because of the existence of leverage and an astronomical derivative
market, coupled with interest rates and its exponential functions, fiat money constantly depreciates,
ultimately leading to the phenomenon called inflation.
After the Nixon shock in 1971 and the abolition of the Bretton Woods system, central banks have
increasingly deviated from their initial orthodoxy of a pure “price stability” mandate. Increasingly,,
“monetary stimulus” was allowed under the premise of a “growth and financial stability” mandate.
This happened all while governments themselves regulated the free market by imposing a number of
taxes and taris on trade.!
Adam Smith 16 June 1723 – 17 July 1790
was a Scottish economist, philosopher and
author as well as a moral philosopher, a
pioneer of political economy and a key figure
during the Scottish Enlightenment. Smith
wrote two classic works, The Theory of Moral
Sentiments (1759) and An Inquiry into the
Nature and Causes of the Wealth of Nations
(1776). The latter, often abbreviated as The
Wealth of Nations, is considered his magnum
opus and the first modern work of economics.
The shiny immutable substance used historically as consensus to save energy and time symbolically. Gold
has been selected by many civilisations over time as the natural medium to store the fruits of one’s labour.
More recently, in the aftermath of the financial crisis of 2008-2009, central banks conducted
monetary experiments such as Quantitative Easing (QE), Troubled Asset Relief Program (TARP),
“Operation Twist”, Outright Monetary Transactions ("OMT") and Asset Purchase Programs (APP).
One can argue they are all dierent manifestations of the same strategy, creating monetary stimulus.
All these interventions lead to a substantial increase of the monetary mass without necessarily having
a real long-term repercussion in the creation of wealth in the same proportion. Conversely, it has
most certainly led to market distortions. Data shows that central bank stimulus mainly benefited
those who hold financial assets; particularly the assets directly targeted by central bank purchases.
The “artificially low interest rates” mentioned in the press are non-other but flagrant interest rate
Many claim this has resulted in monetary oppression of savers and a maldistribution of wealth with
the vast majority of people not benefitting from central bank interventions. In other words, such
interventions are a monetary stimulus for debtors, and monetary oppression of creditors. The United
States of America being the biggest debtor-nation in history, has greatly benefited from this stimulus
directly and indirectly.!
The elephant in the room is the question of moral hazard: First, since central bank interventions have
by-in-large rewarded irresponsible debtors and severely punished savers; and knowing that there
cannot be investment without first creating savings; many fear that this experiment will sadly end like
“The Grasshopper and the Ant” fable by famous French author Jean de la Fontaine.
Second, central banks have continuously engaged in outright manipulation of asset prices starting
with interest rates, but now also bonds and equities. The main moral hazard is that of aecting price
discovery by not letting natural market forces determine asset prices. Price discovery and market
mechanisms have been severely distorted. By extent, central bank balance sheets can arbitrarily
aect valuations. Today, no one knows the real consequences of this financial experiment while many
fear collateral damage resulting in disorderly readjustments sometime in the future. A
“normalisation”, albeit necessary, could imply a system “deleveraging” as described in the book: "A
Template For Understanding Big Debt Crises" by Ray Dalio.!
Third, government bailouts have also raised questions about moral hazard. More recently, evidence
has pointed towards protectionism and government control over taris and trade. Populist
movements have resulted in friction between the 1% of financial asset holders and the rest. The
majority of people can resent those who have benefited from the government’s rescue of banks
despite reckless behaviour and central bank financial stimulus while the general population is left
with an increased debt burden essentially borrowing against the future.
Raymond “Ray” Dalio (August 8, 1949) is an
American billionaire investor, hedge fund manager,
and philanthropist. After experiencing
unprecedented success, Ray started to share his
knowledge through several publications such as:
“How the Economic Machine Works; A Template
for Understanding What is Happening
Now” (2007); best seller: Principles: Life and
Work” (2017) and “A Template For Understanding
Big Debt Crises” (2018).!
In this context, we, TARCO International® and® have established a private sector initiative
to solve “the money problem”, by creating private money based on private property rules and
utilising the immutable$and fully transparent distributed ledger technology with smart contracts. With
this initiative, we wish that in the future, voluntary association without government interference will
create a new wave of economic freedom and further emancipate societies by achieving peace
through trade; guaranteeing fundamental property rights and increasing the freedom of exchange of
goods and ideas.!
The following work is an in-depth analysis which begins with fiat money as a peer-to-peer means of
exchange, unit of account and questionable store of value, and then opens up to whether or not it
will be replaced by new forms of digital currencies ("cryptocurrencies").!
In 2009, an anonymous source published a document entitled "Bitcoin: A Peer-to-Peer Electronic
Cash System" under the alias Satoshi Nakamoto. After a number of years of increasing adoption and
speculation about its value, other cryptocurrencies followed by proposing dierent features: some
being more scalable, others with faster transactions, and oering dierent levels of security,
decentralisation, or privacy and anonymity.!
We will discuss the many scenarios that multiple experts in the field have predicted by analysing the
positive and negative sides of cryptocurrencies as a whole, whether or not they will mark the decline
of central banks or if the role of these institutions will evolve - should they decide to join the crypto
space by issuing their own cryptocurrencies.!
Fiat money derives its value from its support by the issuing government and the trust people put in it.
Cryptocurrencies on the market today are being issued privately in a very similar way as to how
banks have in the past; when it was their responsibility to issue currencies. !
Previously, to provide stability to the financial system, money was issued through a network of
private banks in a less centralised manner. Under that system, the risk was contained only within the
private banks issuing bad loans. An early example of this can be seen in history during 19th century
Germany. The German government being unable to extend their debt and having their finances tied
up by private banks decided to create a joint monetary framework, described in length by Milton
Friedman in his paper entitled "A Theoretical Framework for Monetary Analysis," in 1971.!
Milton Friedman (July 31, 1912 November 16,
2006) was an American economist who received
the 1976 Nobel Memorial Prize in Economic
Sciences for his research on consumption
analysis, monetary history and theory and the
complexity of stabilisation. His life has been
dedicated to analyse, explain and promote
personal and economic freedom.
Thierry Arys Ruiz, founder of TARCO International and AgAu argues that most of the systemic
economic crises are primarily due to poor government policies and irresponsible handling of their
finances. Renowned economists such as Hayek in 1977 point out the risks of continuing
government-backed currencies and advise to revert to the old days of a truly free monetary system,
where the government is not involved. The surge of cryptocurrencies and their eectiveness in the
financial ecosystem aim to support the theory that governments involvement in the monetary system
is no longer required nor wanted by the majority of people. !
Although the first developments are still imperfect, the recent economic crisis and the related
government’s responses exacerbated the public distrust in the main financial and government
institutions previously unrivalled.!
In a way, national currencies such as Pound sterling, U. S. Dollar, Yen and Euro are already
competing with one-another. Unfortunately they sometimes engage in a race to the bottom referred
to as "currency wars". In addition to running unchecked deficits, politically motivated interventions
often result in trade barriers, such as embargoes and imposed taris etc. Ultimately it is the people
who suer from depreciating money, and artificially higher costs for lower quality goods and services
resulting from protectionism.!
Cryptocurrencies on the other hand are, to date, not subject to international banking laws nor any
other form of national regulations which are easily enforceable. This gives them more flexibility but
also risks. Cryptocurrencies benefit from major technological advancements making them ten times
more cost ecient and more secure than the current financial network used by traditional banks.!
Increasingly, people push to reform the financial system. In the meantime, governments attempt to
control digital transactions over a "cashless society"; Sweden being a good example of this situation. !
The question since the conception of digital money and cryptocurrencies has been whether or not
these technologies can replace fiat money as a means of exchange, store of value and unit of
In the midst of a new wave of asset backed cryptocurrencies stands, a cryptocurrency
token system that joins an already vast ecosystem, and is based on the idea of creating a new
gold standard using blockchain technology and fundamental private property laws to back the
tokens with gold and silver as underlying assets.
"The rise of cryptocurrencies is nothing but a signal that the market and the
population at large are looking for better alternatives to fiat money. The
problem with the first wave of what I call "fiat crypto" is that most digital tokens
do not have intrinsic value and become as irrelevant as the fiat they initially
tried to replace. They are still currency or electronic cash, AgAu is Money.”!
- Thierry Arys Ruiz, |
"In other countries, the traditional banking system has failed to reach people
living in remote regions. However, as long as they have an internet
connection, digital money can cover their needs more effectively. The
technology used to design the user’s interface behind digital money will
replace all interactions between banks and account holders."- Antonio Fatas
and Beatrice Weder
Medium of Exchange
Cryptocurrency transactions are cost ecient, relatively anonymous and with immediate clearing and
settlement while electronic cash transactions take time and have geographical limitations.!
Compared to other forms of electronic money and classic bank transfers, cryptocurrencies have the
benefit of not being subjected to a T+3 lag, bank holidays, etc. The straight through processing of
the transactions takes usually a few seconds as of today. The transaction and the clearing are
validated simultaneously. Although the scalability for mass transactions still has to be solved,
cryptocurrency transactions oer some benefits in terms of availability, speed of execution and
evolve in a decentralised system with robust security. That being said, visa and master card
transactions will still likely dominate as global retail payment system in the short term.
Source: GP Bullhound
Store of Value
Much like fiat money, many "first generation" cryptocurrencies do not have intrinsic value. According
to Bofinger's paper "˜Digitalisation of Money and the Future of Monetary Policy", fiat currencies are
most likely to remain the dominant form of money in the short term. In his view, traditional currency
benefits the role central banks play in maintaining the currency's value stable over time. Bofinger
argues that traditional currencies tend to be protected by central banks from financial implosion while
some cryptocurrencies have the potential risk of suering a complete loss of value due to their
seemingly unlimited supply.!
For Thierry Arys Ruiz, fiat currencies have failed at storing value over the long term. Not only does
most of fiat money suer chronically from rampant inflation but central banks have virtually unlimited
printing power. More often than not, there is a direct conflict of interest between the central bank's
ocial mandate of price stability and governments policies usually accommodating growth, credit
and further spending. One can argue that the independence of central banks is often unverified.
Governments tend to overspend and keep their fiscal deficits unchecked, while central banks tend to
deviate from policy-making orthodoxy. Over an average period of a hundred years, "government
backed money" is almost inevitably worthless; besides inflation, the eect becomes evident when
observing the number of technical defaults throughout history.
Non Exhaustive list of sovereign debt crises : !
Unit of Account
In economics, the unit of account represents a nominal monetary unit of measure used to represent a
value unit or a cost. In this sense, cryptocurrencies can usually be divisible up to several decimals
and can be easily accounted for in units. The main pitfall is their volatility. Albeit currencies are
described in units, most are generally not perfectly stable over time. As previously mentioned, fiat
currencies suer from rampant inflation ( as measured by the Consumer Price Index) eroding its value
year after year. That being said, in relative terms the dominant currencies such as U.S. Dollar, Yen,
Euros, Pound sterling, Swiss Francs and increasingly the Yuan are suciently stable to be accepted
as unit of account for global trade.!
On the other hand, pure encryption based cryptocurrencies such as Bitcoin fail at being an
acceptable unit of account due to their extreme volatility. In November 2015 one Bitcoin was worth
approximately 300$, November 2016 between 600$ and 700$, November 2017 6000$ and 9000$,
November 2018 between 5500$ and 3600$. The understanding of what 1 Bitcoin is worth seems
therefore hard to define over the medium term.!
Early stages in Cryptocurrencies
Cryptocurrencies are only nearly a decade old, and probably not ready to replace fiat money just yet,
but could in the near future. As their network grows increasingly, they have the potential to disrupt
the traditional banking system by democratising global transactions in a most cost-eective way.
Another prominent advantage cryptocurrencies have over fiat currencies in the race for economic
domination, is that they can avoid the high financial costs and risks which central banks will incur
should they try to issue their own digital currency because of the necessity to migrate the previous
system. However, it ultimately depends on the willingness of the central banks to delegate their
historic role of controlling the money supply to private entities. !
Transcendental changes such as the abolishment of traditional fiat money from circulation is a
possibility, but it requires a massive political commitment from all countries at a national and
international level.
“At, we are of the view that government and established players will
have too many frictions due to their size and apparent conflict of interest. We
can hardly see how the old financial model can be "migrated" into a new one,
given the structural difficulties. We strongly believe that they rather will be
disrupted.” -Thierry Arys Ruiz, TARCO International |
The "New Taxonomy of Money" graph describes AgAu as the Peer-to-Peer, Electronic Money System
convertible to gold and silver and outside the public realm. Considering gold and silver as money is a
precondition to call it as such. In the meantime, AgAu founders are of the belief that the gold
standard is anti-fragile, meaning that the more it is tested and challenged, the stronger it becomes.!
Initially, we are using the Ethereum protocol because at this moment, it is the most public and widely
accepted, decentralised ledger protocol. Although there are still some challenges of scalability and
potential improvements in privacy, we believe that at this time, it provides us with the best means to
gain wide acceptance. That being said, we will continue to explore other protocols and could also
issue our tokens in other ledgers, should we see more appealing conditions for our users. We adhere
to the philosophy of personal and economic freedom and would want to get feedback from the
market to ultimately create the most competitive form of money.!
Peer-to-Peer Lending Based on AgAu
AgAu tokens are issued 1 to 1 meaning that in its primitive form, there is no fractional reserve or
lending with interest. It is however not impossible to imagine a peer-to-peer banking and a lending
platform as the ecosystem grows. For example “crypto banks” could provide incentives such as
eliminating storage fees from the smart contract in the form of "token credits”, or rewarding clients
with with real world assets, future AgAu emissions, or else… essentially, re-creating a parallel
banking system. Albeit this could potentially be reproducing the errors of the past, in the great
scheme of things, we insist in giving the choice to clients by first issuing "hard money" (AgAu tokens
in its primitive form).
"Anytime we have departed from the gold standard, the fundamental
characteristic of money as a store of value has been damaged."!
Thierry ARYS RUIZ, AgAu Founder
AgAu and The Taxonomy of Money - Copyright © TARCO International ® AgAu®
Inspired by the money flower from The Bank For International Settlements
Anonymity & Privacy
As of today, all transactions in the cryptocurrency market are recorded using public addresses, the
user identity behind these addresses is anonymous, and whoever chooses to send their tokens to
another address is not required to reveal their identity (counterparty anonymity). Other peer-to-peer
protocols go as far as to mask the transactions themselves by randomising and pooling transactions
in a certain way. The community is working on peer-to-peer protocols that can provide the same level
of anonymity that cash provides in a digital way.!
There are legitimate reasons for anonymity amongst those who actively use cryptocurrencies, as it
helps reduce the risks of identity theft and avoid other privacy issues. Some argue that the problem
with the level of anonymity leaves the door open to all sorts of illegal activities ranging from tax
evasion, money laundering, drug trade, ransom, terrorist funding and many more. Others argue that it
is fundamental to protect individual and economic freedom based on privacy and voluntary
transactions. Although both are somewhat true, there is nothing cryptocurrencies do today, that
hasn't been done in the past with cash or other alternative payments such as art, gold bars, etc.!
At AgAu, we like to paraphrase Benjamin Franklin in stating that any society that would give up a little
liberty to gain a little security will deserve neither or lose both.!
Optimal Payment Solution
With precious metals such as gold and silver still being one of the preferred methods to save money,
and with digital payment solutions on the rise particularly in emerging markets, AgAu is positioning
itself as a$superior form of money to preserve wealth and transact with.
AgAu is issuing two dierent tokens, one backed by gold (AgAu Gold) and one backed by silver
(AgAu Silver). Using decentralised ledger technology, the tokens are not bound to central banks or
exchanges. Purchasing one AgAu token makes the consumer the owner of one gram of 99.99%
London Bullion Market Association (LBMA) quality gold or silver. The precious metals are held in
secure private vaults in Switzerland and Liechtenstein, and therefore protected by the most
fundamental property laws in historically secure jurisdictions.
The precious metals are held as redeemable bars that are audited in allocated and segregated
accounts. AgAu is setting up a transparent system making the token holders the direct owners of
their respective portion of the allocated precious metal bars as well as a screening system to perform
due diligence and verify the audits and documents proving ownership in total transparency.
Gold Bars / Coins
Commodity money is created from a good, often a precious metal. In the Wealth of Nations by Adam
Smith, the value of gold as money is justified because it closely fulfils all requirements of a unit of
account (in the case of coins), universal medium of exchange and store of value due to the chemical
property of gold (Au) being immutable in time and therefore serves as a good standard to store value
over the long term.!
Still today, gold is a major financial asset for countries and central banks. !
Gold is still often used by the banks as collateral against credit, and is usually seen as an
indicator of economic health.!
Depending on the financial institution gold is viewed as a currency like the Euro, Yen or U.S.
Dollar rather than a commodity as it can be used as a form of bank reserve.!
Because the global gold supply only grows slowly, applying the gold standard would
theoretically hold government overspending and inflation in check. This would also limit inflation
as money cannot be "printed" at will. !
Gold as money would therefore be deflationary as it would have the tendency to gain
purchasing power as wealth creation would grow faster than the money supply, this eect
would be a burden for debtors and incentivise savings. In this context, investments are only
desirable when the rate of return of the investment is greater than the appreciation of money’s
purchasing power over time.!
The US eectively abandoned the gold standard in 1933, and completely severed the link
between the dollar and gold in 1971.!
A gold-backed currency means a fixed amount of currency will often be redeemable for a fixed
amount of gold.!
Gold is a tangible asset that is expected to hold its value in case of financial market crashes,
functioning as a safe haven, or if inflation takes o as the nominal value of its price would
Today’s problem with precious metal bars and tokens are related to practicality, as they cannot be
transacted and casted easily, and the need for constant assay and testing quantity and quality
verification would be a burden in the monetary system. AgAu can solve both problems as the
precious metal is tested, certified and audited and the tokens evolve in a transparent and trusted
system where very small fractions can be transacted electronically. The precious metal backing AgAu
tokens is LBMA quality (London Bullion Market Association) of about 99.99% purity, the seal of
quality is also guaranteed by the assay, testing and audit our the precious metal. Transacting the
tokens instead of the metal in and out of a free wallet allows the customer to be sure that the metal is
existent in good standing and that the quality has not been tampered.
Public Minted Gold/Silver Coins
Gold and silver coins have intrinsic value and were considered the best form of money for longer
than our recent fiat or cash system. In the case of public minted coins, it is usually a centralised
authority such as the government, the treasury or a private bank who will be issue public minted
coins. This is to say that a certain counterparty will be kept as a sign of trusted authentication of the
assay (testing). One early problem besides relying on the authentication of a central authority is that
the value could be altered by rubbing, using, counterfeiting etc.!
A gold/silver coin is made mostly or entirely out of gold / silver. Nowadays, many retail investors
purchase precious metal coins although few realise that such gold is rarely of "certified quality" and
buyers might ask for the metal to be tested or assayed when changing hands. This process is
impractical and expensive sometimes costing a valuable fraction of the metal’s value.!
Modern gold coins emitted by certain banks are also a legal tender, they are not observed in
everyday financial transactions, as the metal value normally exceeds the nominal value. Public
minted gold/silver coins are mainly a thing of the past although there are still some mints certified by
governments who mint such public minted coins.
Cash is the physical form of currency, such as banknotes and coins. The key dierence between
cash and credit is that one is currency (cash) and the other is currency credit obtained from the bank
by individuals when depositing their cash. Cash is so far the most private form of currency as there is
no clear traceability of past transactions. Cash has long been a favourable medium of exchange for
des intermediated trade on a peer to peer basis.!
Cash is primarily issued by central banks to trusted parties on the primary market but is in free
circulation on the secondary market.!
Cash is a practical way to transfer wealth in a private way but more dicult to execute as
cross-border payment when the cash has to be transported physically.&
Cash has more recently been accused to be facilitating “illicit” activities as well as tax evasion.
Therefore an increasing number of governments advocate for a cashless society.
Printing Press, Federal Reserve
Minted Coins “Libertad”, Banco de Mexico, Credits:
Today the creation of cash by central banks represents less than 10% of
all the money in circulation. Cash is classified as "narrow money" and
referred to the monetary base (M0). The balance (MB, M1, M2,M3,M4) is
created by private commercial banks out of debt and credit through a
fractional reserve banking system and debt-based leverage products such
as certain financial derivatives and other financially engineered products.
Hayek Bank
The Hayek Banking system functions as network of private entities in a free banking ecosystem. The
free competition of banks and money would in this case push for a higher quality of money and
consumers would then decide which money or which bank best suits their need. By having a private
system, bank failures would be isolated and creative destruction would curate the system and allow
further improvements. !
Hayek is of the view that:
Private investment, rather than government spending, would promote sustainable growth. !
Monetary expansion causes more benefit than harm.!
The use of monetary policy to increase employment is the wrong approach.!
Central banks will create a moral hazard.!
AgAu mostly agrees with F.A. Hayek and the concept of the denationalisation of money, we believe
that DLT/Blockchain technology allows to issue a superior form of money by utilising the
convertibility to gold encoded in an immutable system and therefore guarantees a practical electronic
form of money backed by precious metals. AgAu tokens are a natural competition to other forms of
Friedrich August von Hayek
8 May 1899 – 23 March 1992.!
F.A. Hayek, was an Austrian economist
and philosopher best known for his
defence of classical liberalism. Hayek
shared the 1974 Nobel Memorial Prize in
Economic Sciences with Gunnar Myrdal
for his pioneering work in the theory of
money and economic fluctuations.
"No government is capable, politically or intellectually of providing the exact
amount of money which is needed for useful economic development. I am in
favour and I am convinced that we will not have decent money again before
we take from government the monopoly of issuing money; and allow
competing institutions to issue competing moneys and let people decide
which kind of money they prefer to use". - F. Hayek, The Denationalisation of
Money interview, 1985
Hayek Banknotes
The "Free Banking" Era of 1837 to 1862 is a period where only private banks (state-chartered banks)
were able to issue their own paper currency (banknotes) against gold and silver. These banks were
heavily capitalised and has high reserve requirements, interest rates for loans and deposits, as well
as capital ratios. The abolition of the government monopoly of money was conceived to prevent
acute inflation and deflation. As seen previously, Hayek is of the view that the denationalisation of
money is to be achieved by the abolition of the government's monopoly over the issue of fiat money
leaving the way open for supply of money to be determined by comprehensive private sector
The Tumín is an alternative currency used in the municipality of Espinal, Veracruz, Mexico, as a
complementary currency. Its name means "money" in the Totonac language. It was first put in
circulation in 2010 as a student project trying to find ways of strengthening the local economy. The
project creators analysed the economy of the area and concluded that there were sucient goods
and demand, but that a medium of exchange was lacking. The creators designed bills and started
promoting its use as an exchange coupon among locals in order to support a barter economy.
In order to participate one has to produce a product for exchange, and declare that they want
to be a member. Each member is provided with 500 Tumín and a directory of the other
members, with whom they can exchange services using the currency. !
A member commits to charging at least 10% of the worth of a product to be exchanged in
Tumín, eectively lowering the price of goods at no cost to the seller since the initial 50 Tumín
were provided for free.!
A Tumín is worth one Mexican peso and can be exchanged for that amount.!
The desired function is to establish a preference for buying goods from other community
members since Tumín only circulate within the community.!
The Tumín has been described by journalists as reinvigorating the economy of the municipality,
but has also been criticised by the Mexican National Bank for being an attempt to substitute the
Mexican national currency, the peso. !
The Mexican National Bank sued the developers of Tumín for acting against its monopoly on
printing money, the lawsuit is still ongoing. The creators state that the accusations are invalid as
Tumín does not replace money, but is rather an instrument for barter. !
One 2013 study argued that the currency was ineective in reaching the goal of improvement of
the community's economy, but that it has been successful in promoting mutuality and solidarity
within the community. &
The system however does not work if participants raise prices, or if some members accumulate
Tumín since that implies that a member does not buy products from others, or if all Tumín are spent
without providing goods for others to consume. Tumín is a non-electronic, peer-to-peer cash system
with a consensus or "psychological peg" to the national currency which provides it a relatively stable
Similar to some fiat-pegged cryptocurrencies, the value of the Tumín is based on a fiat and is subject
to inflationary game theory flaws besides being exposed to speculation and loss of confidence.
Standard Bank Deposits
A deposit is the placement of funds (or money) in an account (savings or checking) with a bank or
other financial institution. The account holder has the right to withdraw deposited funds, as set forth
in the terms and conditions governing the account agreement. Major types of bank deposits are:
current accounts, savings accounts, recurring deposits and fixed deposits. Under the standard bank
deposit system:
Banks can aect the money supply through demand deposits or loans that the bank funds
through cash deposits it receives, and through using interest rates to create their own profit. In
this way banks are creating money to increase the money supply in the economy.!
Demand deposits at commercial banks are part of the M1 money supply. Time deposits below
$100,000 are included in the M2 money supply, and time deposits above $100,000 are included
in the M3 money supply. The measure of M4 has been discontinued in the USA.!
After depositing money in a bank, the bank will typically lend to a business in need of funds.!
The more money an institution has in demand deposits, the more money it must keep in
reserves, either in vault cash or on deposits with the central bank.&
Today, standard deposits work within a fractional reserve framework, meaning that only a fraction of
the deposits are held as bank reserves. The deposits represent in reality credits but not the actual
ownership of the money for the client. In the case of gold, people often enter similar contractual
schemes. In a bank, a purchase of unallocated gold makes the client a creditor of the precious metal
but does not always own it. In this instance, customers are usually only protected up to the
government’s deposit protection guarantee in case of a bank default, sometimes only up to
Fiat Currencies
Fiat money has very little intrinsic value (paper, metal coin) and is not directly convertible to gold or
silver. Fiat currency has been “established as money” by decree to perform financial transactions,
often by government regulation and law:!
Fiat currencies have value only because the government says it does and people trust it.!
Changes in public confidence in a government issuing fiat money may be enough to make the
fiat currency worthless.!
Often other forms of money are simply not legal in certain countries.!
Fiat is legal tender, which means that the currency is backed by the full faith and credit of the
government issuing it. This however also means that governments have full authority over it and
can impose sanctions or declare certain transactions illegal (i.e prohibitions, embargoes, etc.)!
Central banks often use their monopoly on the “money supply” in an attempt to manage prices
and macro-economic business cycles.!
The value of “fiat money” solely rests on the trust and confidence that users have in the underlying
government to stabilise its value. Therefore there is a clear link between a government’s policy and
the economic value of its legal tender, despite the fact central banks are advertised as
"independent". The “fiat money supply" has largely increased since the acceptance of fiat currencies,
as the system has constantly reduced the amount of reserves in fractional system and increased its
leverage through credit and debt in all its forms, including public and private debt.
AgAu tokens have no fractional reserve system, but are based on a
simple 1:1 backing of 1 gram of precious metal (gold or silver) for 1
token. The precious metal is held in the form of allocated and segregated
gold and silver bars, meaning that the underlying cannot be swapped or
leased. The system is transparent and allows the customer to see that no
token has been created without an equivalent gold or silver backing.
One Hundred Trillion Zimbabwean Dollars
Central Bank Deposit (CBD)
The Central Bank Digital Currency (CBD) is the digital form of fiat money which is a currency
established as money by government regulation or law. CBD is also called "Digital Fiat Currency" or
"Digital Base Money"(DBM). CBD or DBM would be accounted for and transferred using computers.
CBD is not tangible and is classified as electronic money:!
A digital currency does not have to be based on encryption, but it should be available in a
digital form and enable digital transactions, to allow for instantaneous transactions and
borderless transfer-of-ownership.!
A cryptocurrency such as Bitcoin are also a digital and virtual currency but is not in the public
realm so do not fit this category.!
The implications of such a digital currency focus on central bank seigniorage, monetary policy,
the banking system, financial stability and payments.&
Universal Money / Vollgeld (Sovereign Money Initiative)
The Swiss sovereign money initiative of June 2018, also known as Vollgeld, intended to give the
Swiss National Bank (but not commercial banks) the sole authority to create “fiat money” essentially
putting an end to fractional-reserve banking. The Swiss National Bank and The Deutsche
Bundesbank expressed criticism of such proposals for "full-reserve banking" going also by titles
such as "debt-free money" schemes claiming they misunderstand central-bank operations, money
creation, and how the banking system works. This type of currency would be still backed by
government's trust and debt therefore is still classified as non-convertible “fiat money”.!
Under Vollgeld, “fiat money” is created as debt, comes into existence by debt creation when
commercial banks borrow from central banks, and when governments, producers, or
consumers borrow from commercial banks. 1:1 without fractional reserve therefore is limiting
the somewhat exponential leverage.&
Vollgeld supporters argue that the initiative mainly avoids the adverse eects of monetary
expansion such as inflation, limits leverage and therefore the magnitude of possible financial
According to the SNB: "Abandoning the current system of interest rates targeting in favour of
monetary targeting would be an unnecessary and regressive step”. This means that the SNB could
only influence the monetary mass and not the interest rate.!
AgAu is in fact truly “debt-free” money since it has not been created by debt neither does depend on
interest rates. The major limitation of AgAu is the amount of gold or silver available to be “tokenised".
In this sense, there is a limited supply and it would require the free market to adjust its price ceteris
Campaign for the Vollgeld initiative, Swiss National Bank, Campaign against the Vollgeld initiative
Central Bank Deposit (gold standard)
The gold standard is a monetary system in which a country's currency or paper money has a value
directly linked to gold:!
With the gold standard, countries agreed to convert currency into a fixed amount of gold. !
A gold reserve is the gold held by a national central bank, intended mainly as a guarantee to
redeem promises to pay note holders, and to support the value of the national currency.!
All gold ever mined is estimated to total about 187,200 metric tons in 2017. With a total value
about US$7.5 trillion.!
The United States holds the largest stockpile of gold reserves in the world.!
Under this system any government holding a high amount of gold acts as a reserve currency for
performing transactions in international trade. !
A gold standard provides a self-regulating system as prices must adapt to changes in the total
gold stockpile allocated to the system.!
The gold standard highly impairs budget deficits. A gold standard means that the money supply
would be determined by the gold supply and hence monetary policy could no longer be used to
stabilise the economy for better or for worse.!
A Central Bank Gold Standard implies that the money issued has a value directly linked to gold
although the proportion of the backing can vary. In history it has been common for central banks and
governments to deviate over the long term from orthodox practices often"debasing" the currency by
reducing the precious metal backing in quantity or quality; a popular example being the debasement
ordered by the Roman emperor Nero in 64 A.C.!
Having unlimited power in a centralised level with a central bank or government with no legal
accountability can be dangerous to the continuity of such a system, as the world has experienced in
1971 when US president Nixon arbitrarily abolished the convertibility into gold.
“AgAu backs each token by 1 gram of precious metal and writes the rule in an
immutable smart contract to prevent from debasement practices. The code is
law. We remove centralised parties and intermediaries as much as possible by
allowing direct ownership between the token holder and the vault therefore
being based on private property laws” - Thierry Arys Ruiz, AgAu Founder
Richard Milhous Nixon (January 9, 1913 – April 22, 1994)
was the 37th President of the United States from 1969 until
1974, the only president to resign the oce. On August 15,
1971, President Richard Nixon addressed the nation on the
topic of a new economic policy. In his address he directed to
suspend "temporarily" the convertibility of the dollar into
gold.. What followed is now known as the "Nixon Shock”.
CBDC: Central Bank Digital Currency
In the case of a central bank digital currency, only a central bank, for example, the US Central Bank
would issue a FedCoin with a one-to-one convertibility value with cash and reserves. The main
advantage of this form of cryptocurrency would be that the fiat money supply would be fixable and
under the control of the central bank. Also, the central bank as the creator of the coin could
determine whether or not all transactions could be carried out anonymously or not, as well as decide,
whether or not to protect the identity of the agents involved - according to Bech and Garratt, in a
paper issued by the Bank For International Settlements.!
In countries where using cash is rapidly decreasing, some central banks have started to develop
strategies to allow the public to hold an account with the central bank. The most popular approach is
the e-Krona in Sweden, which will enable the cryptocurrency to replace cash in all transactions,
including commercial bank deposits. !
The potential advantages of having such a system is that the FedCoin could present the advantage
of improving the eciency and scalability of payment systems because the central bank could create
a centralised ledger that will make all transactions settled much faster by removing intermediaries.
Although this would sacrifice decentralisation and potentially privacy for the benefit of scalability and
On the flip-side, CBDCs would have to compete directly against commercial banks and attempt to
reduce their importance as payment services providers, meaning they could become an active threat
to the business models set by commercial banks according to authors Bech and Garratt. !
Although we doubt it, if anonymity was preserved, it would still allow for a wide array of illegal
activities. From a technical standpoint CBDCs themselves could not be considered a Cryptocurrency,
but rather an evolution of the digital currency. CBDCs might be rejected by the crypto community, as
it is a fundamentally centralised system. And finally, the responsibility to comply with KYC and AML
(Know Your Customer and Anti-Money Laundering respectively) would fall entirely on the Central
In conclusion, we argue that a cryptocurrency backed by a central bank creates many potential risks
(centralised risk, privacy, etc.) while the upsides are limited.
The Bank for International Settlements (BIS) is an
international financial institution owned by central banks
which "fosters international monetary and financial
cooperation and serves as a bank for central banks”. The
BIS carries out its work through its meetings, programmes
and through the Basel Process hosting international
groups pursuing global financial stability and facilitating
their interaction. It also provides banking services, but only
to central banks and other international organisations. It is
based in Basel, Switzerland, with representative oces in
Hong Kong and Mexico City. - Wikipedia
Wholesale Central Bank Cryptocurrencies
In this scenario, the central bank can issue a special kind of "token" or cryptocurrency specifically to
work with companies and financial Institutions. The main idea behind this is to improve cross-border
transactions. This is known as a central bank cryptocurrency in the wholesale system. While FedCoin
is still in the conceptual stage, some central banks have already provided a proof of concept for
wholesale CBDC applications based on DLT. The primary motivation behind central banks supporting
these kind of solutions using DLT is that the current Wholesale Payment Systems are reaching the
end of their useful technological life and their database has become costly to maintain. This has a
negative impact on the eciency and the costs of keeping this payment system.!
A good example of Wholesale CBDCs is an RTGS system (Real-Time Gross Settlement), where all
payments are processed immediately and individually. To accelerate the process of developing the
current banking infrastructure, banks were forced to give access to payment providers and their
technologies (APIs). Nevertheless, improving the existing retail payment systems for cross-border
transactions is a dicult task, there is the complication of having to deal with payment transactions
across dierent currencies implying foreign exchange costs. Second of all, there is no regulator or a
central bank to impose universal standards, meaning that more players can challenge the existing
status quo. (Fatas and Weder di Mauro, 2018)
The traditional banks can provide RTGS transactions services, but they are faced with two
diculties, the first one is that changing the established legacy systems and coordinating across the
conventional payment networks, can be time-consuming and somewhat costly. More to the point,
when dealing with international transactions, they have to deal with the diculty of managing liquidity
pools in dierent currencies as there is no central regulator. Now, a fresh system based on a
cryptocurrency acting as a global currency looks like a winning option.
The Federal Reserve Bank of New York
The arguments can be summarised as follows:!
The previous form of CBDC is called "Retail CBDC".The second type called "Wholesale CBDC"
aims to be used for international transactions. It would however be limited to institutions but not
the general public. Fedcoin, would be an example of a retail CBDC. !
The concept is for the central bank to create its own cryptocurrency. !
The currency could be converted both ways at par with the national currency where the
conversion would be managed by central bank. !
Instead of having a predetermined supply rule, as is the case with Bitcoin, the supply of
Fedcoin would, much like cash, increase or decrease according to the monetary policy. !
Unlike Bitcoin, Fedcoin would not represent a competing, private "outside currency" but would
instead be an alternative digital form of sovereign fiat currency.!
Fedcoin might facilitate automating taxes, automating the distribution of money and a
transparent government.!
It would enable the government to benefit from programmable currency without losing control
over it. The government could attempt to legally ban every other open cryptocurrency they
cannot control.!
Whether governments will succeed is not clear due to the centralised governance system.!
There is little upside for central banks to issue retail digital currency except for better
transparency and monitoring of transactions.!
In conclusion, we argue that a cryptocurrency backed by a central bank creates many potential
risks while the upsides are limited.
Fedcoin Gold Standard (Gold backed CBDC)
Under this hypothetical form, a CBDC would be convertible to gold. The Fedcoin Gold Standard for
example could be an alternative to return to the gold standard after nearly 50 years of “temporary
suspension” and utilising the new distributed ledger technology to do so.!
The Bank of England suggested to have a system merging the cryptocurrency and gold
standards to have the benefits of blockchain technology and the stability of the gold standards.
This can be done privately or by central banks.!
The remaining concern is that the Fedcoin Gold Standard could either start or accelerate the
economic depression due to its deflationary nature.!
One of the most common proposed solutions has been some version of a full reserve model
(Vollgeld), where every deposit is backed by an equivalent amount of government currency in
the vault, thus making deposits risk-free but not necessarily backed by gold.&
We doubt that Fedcoin Gold Standard would be implemented in the near future, since it highly limits
the ability of central banks to control monetary policy. Perhaps this could be conducted in theory by
a central bank in response to a reputation crisis or to loss of confidence in the fiat model. We can
hypothesise that the People"s Bank of China (PBOC) could easily rival the dollar supremacy with a
partially gold backed digital Reminbi/Yuan for example to be used in their “Silk Road” Agenda.!
In practice, there would be several burdens to overcome in order to guarantee that history won’t
repeat itself. A partially backed currency opens the door for further depreciation, and the confidence
in the ability of central banks to "manage" the economy could be inferior to that of an immutable rule,
establishing a parity 1:1 model, which is not controlled by any politicised party.
Inconvertible Deposits
At the opposite side of a Hayek Banking system, in which private property is guaranteed,
inconvertible deposits are basically "socialised deposits", because the deposits cannot be
withdrawn. This was the case during the Argentina crisis, in which deposits became inconvertible by
government decree, with the intention to stop a "bank-run". Essentially, depositors could not convert
their deposits back into cash. Empirically, depositors would usually commit their deposits into other
financial vehicles that are more liquid or instruments that allow them to liquidate them through other
means. In Argentina this happened during the crisis of 2001, depositors who purchased stocks with
inconvertible deposits in order to liquidate them at a later stage through oshore accounts.
To sum it up, the evidence suggests that the boom reflected the desire of depositors to shift their
inconvertible deposits out of the banking system, although not necessarily out of the country. More
often than not however, this leads to depositors switching into a more convenient form of money for
current transactions.
Banknote Gold Standard
The gold standard is a monetary system in which a country's currency or paper money has a value
directly linked to gold. With the gold standard, countries agreed to convert paper money into a fixed
amount of gold. A gold standard is a monetary system in which the standard economic unit of
account is based on a fixed quantity of gold.!
Because the global gold supply grows only slowly, reintroducing the gold standard would
theoretically limit government overspending and keep inflation in check.!
The gold standard is usually criticised because, if an economy grows faster than its money supply,
the natural result would be an appreciating purchasing power of the gold backed currency; also
called a deflationary eect. Deflation is a direct incentive for savers and a loss of opportunity for
consumers. Keynesian economists argue that deflation can result in depression, as consumers have
a tendency to spend later rather than immediately, assuming that the purchasing power would
increase over time.
On the other hand, Austrian economists argue that while this certainly incentivises conservative
approaches of consumption, it doesn't prevent consumption entirely, since many would value an
immediate consumption, rather than waiting when the present value of the good or service is higher
or represents a better opportunity than the expected deflation, for example in the case of productive
assets. One clear example is computer purchases. While the price of electronic devices constantly
drops and their eciency increases, consumers still consume them by necessity and value their
immediate utility.
Samples of US dollar banknote redeemable for gold
Gold Certificates
A gold certificate in general is a certificate of ownership that gold owners hold as title of property.
Instead of storing the precious metal themselves, vaulting facilities guarantee the safekeeping of the
metal as well as certifying their quality.!
Holders may redeem the certificate in exchange for the corresponding metal.!
Banks may issue gold certificates for gold that is allocated, in which case the customer is
owner of the precious metal or unallocated, in which case the customer is a creditor of the gold.!
Unallocated gold certificates are a form of fractional-reserve banking and do not guarantee an
equal exchange for metal in the event of a run on the issuing bank's gold deposit. !
Allocated gold certificates should be correlated with specific numbered bars.!
Gold certificates can resemble a paper bank note, and have been used as legal tender in the
past. &
Gold certificates were in general circulation in the United States and used as money until 1933. Gold
certificates represent ownership of a value or quantity of gold, similar to how stock certificates
represent an ownership share in a company. Because a gold bullion is dicult to transfer and store,
gold certificates facilitated the ownership and use of gold when it was a legal currency. Rather than
carrying around coins or bullion, transactions could be carried out using these certificates of
ownership. Today, gold certificates are used primarily for the purpose of simplified ownership of gold
as an asset.!
AgAu aims to serve as a digital form of a gold certificate in the sense that it represents allocated,
segregated precious metals.!
Barter is a system of exchange, in which participants in a transaction directly exchange goods or
services for other goods or services without using a medium of exchange, such as money. The value
of bartering items can be negotiated with the other party. Barter system involves various diculties
and inconveniences such as:!
Double coincidence of wants!
Absence of common measure of value!
Lack of divisibility!
The problem of storing wealth!
Diculty of deferred payments!
Problem of transportation!
It is dicult to engage in contracts which involve future payments due to lack of any satisfactory unit.
As a result, future payments are to be stated in term of specific goods or services.!
The main advantage of money over barter is that money is always going to be usable. Barter is very
often not a possible option. This is because of the need for what is called a "coincidence of wants"
sometimes called a "double coincidence of wants".!
Although exchanging gold for any other particular good would also constitute as barter, AgAu aims to
achieve a consensus in price over a very liquid asset where price discovery can be facilitated and
therefore gaining the properties of medium of exchange in addition to the store of value. The unit of
account property would be achieved by establishing a free market price for 1 gram of gold and
allowing the material to be transacted over several decimal units by using our technology.
Bitcoin/Cryptocurrencies & Electronic P2P Cash Protocols
In the case of Bitcoin, an electronic peer-to-peer (P2P) technology operates with no central authority
or banks managing transactions. The issuing of Bitcoins is carried out collectively by a network.!
Electronic P2P is an online technology that allows customers to transfer funds from their bank
account or credit card to another individual's account via the Internet or a mobile phone.!
Cryptocurrencies like Bitcoin or Ethereum use cryptographic technology to insure the security
and a decentralised system to ensure the integrity of the transaction ledgers.!
The proof-of-work proposes a solution to solve the double-spending problem by using
cryptographic encryption and forming an immutable record that cannot be altered.!
The system rewards "miners" who deploy resources to verify current and past transactions and
maintain the integrity of the ledger (decentralised database).&
Besides certain caveats such as 50% attacks and other exploits to tamper the system, the Bitcoin
protocol seems increasingly robust albeit somewhat impractical in terms of its potential scalability.!
Other Cryptocurrencies:
Utility tokens such as Ethereum and others, mostly derive their value from the "utility" or service they
provide. In other words, they represent a promise that such a token will be of utility in the future for a
particular usage.!
Other cryptocurrencies use a similar protocol but can be based on dierent forms of governance or
consensus and rewarding systems. As of 2018, the most common protocols are biased towards a
proof of work (POW) where "miners" become the central authority by being able to create the
currency, giving a major part of the wealth and economy to "mining" entities. The other increasingly
popular consensus is a proof of stake (POS), giving an advantage to the entities who have previously
accumulated the digital currency. As many other consensus mechanisms are evolving and still going
through an experimental phase, one of the major problems of cryptocurrencies and utility tokens in
particular is their volatility. It is relatively easy to duplicate a distributed ledger network, therefore the
barrier to entry is low.!
“With AgAu, we are not reinventing the wheel, we are just
taking something that works over millennials and
applying latest technology, allowing us to be more
transparent and remove the political aspect from money”.
-Thierry ARYS RUIZ, Founder of
“The argument of Bitcoin being valuable by virtue of it’s
network echoes those attempt to value a Ponzi scheme or
any other fiat system”
“Forking or duplicating a network is so easy that one can
argue that there is no real intrinsic value in many
cryptocurrencies and therefore rendering them as fiat as
the fiat they attempt to replace”
The original Bitcoin Logo as designed by
Satoshi Nakamoto for the original Bitcoin client
While it is true that AgAu remains by nature somewhat centralised, we are still flesh and bones, so we
still need the chemical elements of gold and silver to store value in the long term. In order to mitigate
from centralisation risk we make sure the token created represents the direct property right of the
token holder. We believe that in the future, money as we know it will cease to exist, and we might be
transacting in terms of time and energy in some other way… but until we are all “plugged into the
matrix” and/or decentralise ourselves into an AI “singularity” protocol, we are stuck with the current
boundaries of a four-dimensional reality. There is no such thing as a perfect system… with AgAu we
will be able to achieve a much better monetary system than today’s current conditions using the newly
available technology. In the spirit of a “Hayek Bank” we believe that we can offer a better choice of
money and stimulate competition in the years to come.
by: Abdul-Hadi Bashir Subhia and Joe Thierry Arys Ruiz!
Copyright © 2018 TARCO International GmbH
Adam Smith, The Wealth of Nations, 1776!
Milton Friedman, A Theoretical Framework for Monetary Analysis, 1971!!
Friedrich Hayek, The Denationalisation of Money, 1976!!!
Ray Dalio, Principles For Navigating Big Debt Crises, 2018!!
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Bech, M., & Garratt, R. (2017, September). The Bank for International Settlements. Retrieved
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Swiss National Bank, Arguments of the SNB against the Swiss sovereign money !
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Origin. Founded on 17 May 1930, the Bank for International Settlements is the world’s oldest international financial organization.
Principles For Navigating Big Debt Crises
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