thecoinrepublic.com
- Stablecoin’ Yuga Coin’ tokenized crypto asset backed by sovereign debt
- Fully compliant with money laundering and Financial Action Task Force (FATF) guidelines
- Incorporates regulatory-approved identity verification standards
History was created when the Puerto Rico-based digital FV Bank was awarded the patent for stablecoin, designed solely on government debt.
Last year, the patent application was submitted upon a pre-existing patent in the name of Nitin Agarwal and Miles Paschini. The duo describes their instrument as a ‘tokenized crypto asset backed by sovereign debt.’
The stable coin has been christened ‘Yuga Coin’, which means the union of two things in Sanskrit means the union of two generations as told by Agrawal to a prominent crypto journal in an interview on Tuesday.
Agrawal added that the latest stablecoin had been created in full compliance with money laundering and Financial Action Task Force (FATF) guidelines about different currencies. The stablecoin is government-friendly and KYC or Know-Your-Customer complaint.
Every stable coin will be redeemable 1:1 against any fiat currency and backed by national treasury instruments (including bonds and treasury notes) of the corresponding nation. The stablecoins created and denominated in U.S. dollars or Euros at first will be a controlled network adjusted to rate the risk of trading with particular counterparties.
Stablecoins are deemed more stable than cryptos pegged to fiat currency since they are not dependent on a single banking entity holding the collateral. The patent reads that the stability of tokenized crypto assets is more akin to the stability of the government debt.
Today’s market is overflowing with different versions of stablecoins pegged to either commodities or fiat currency, for example, USDT and USDC. However, stablecoins pegged to government debt are scarce.
Agrawal was at pains to explain that stablecoins must be multinational and multi currency. However, Stablecoins backed by banks hold all the funds in government securities and no fractional reserves and act as an impediment towards making stablecoins international and multicurrency. This impediment must be removed, and we are taking this approach.
Focus on being more compliant in the eyes of the regulators
Most crypto enthusiasts are focusing on being more compliant in the eyes of the regulators. It is an exercise that is very important to provide legitimacy to cryptocurrency trade. FATF has issued new guidelines for virtual assets and their providers, and the rules are the same, which is enforced on traditional financial institutions.
Yuga Coin incorporates the regulatory-approved identity verification standards
In line with this notion, Yuga Coin incorporates the regulatory-approved identity verification standards and an integrated risk score similar to a FICO credit score in traditional finance. Agrawal added that Yuga Coin would have the stamp of authority by a regulated and trusted entity later recorded on-chain. Once the user is identified in their wallet, the end-user can then control who can view their identity verification.
Agrawal said that the concept was made three years back when the stablecoins market cap was less than $10 billion. Our idea has been deemed perfect today as the right way to run a stablecoin. The aim is to enable the international government to manage corporations’ transactions, inter-government transfers, nurturing trade, global B2B and B2C dealings, and as a store of value among persons. The design is such that it opens up numerous possibilities and also provides a trusted means of holding and transacting money, enabling multiple innovations.
The way out to make stablecoins more government-friendly is to encourage new concepts in banking, payments, finance, capital markets, and asset registry by employing Blockchain technology. Stablecoins provides a global, decentralized, immutable, and auditable way of transacting. Crypto has a way out for all anti-money laundering problems globally, and this project shows the path to achieve it.