Philippe Marchesseault • almost 12 years ago
RCM as custodian of foreign currencies & gold
While thinking about how the Royal Canadian Mint (RCM) works with other government entities, it occurred to me that the RCM does not create real Canadian dollars when issuing digital dollars. They receive "real" (non-MintChip) Canadian dollars from the Bank of Canada which is the true owner of the Canadian money supply. Thus, the Mint only acts as a custodian of Canadian dollars on behalf of its digital users (Mintchip users). Of course, even the "real" dollars are digital, but in another form (non-MintChip).
I wonder if the Mint could also act as custodian for other currencies. Doing this would guarantee convertibility of every foreign note issued by the RCM thru MintChip. This means that if you receive a Euro from another MintChip user, you know that you can always go back to the RCM to get a “real” euro coin back. Actually, that would be the only way the Mint could issue foreign notes without increasing the foreign money supply. Same thing goes for any other currency.
The idea can even be extended to non-fiat monies like gold and silver. The RCM would hold one gold gram for each gold gram issued with MintChip. You can then pay others in gold grams with a MintChip. You can redeem each gold gram stored in your MintChip with real gold grams from the Mint. Gold grams would simply be another currency code.
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