Empowering People. Uniting Communities.
Qbix works with communities to release their own local social network, and help gradually onboard all the administrators, members, and guests. This lets people connect over common interests, date, make reservations at local establishments, get group discounts with local merchants, and so on. Meanwhile, the community could get statistical reports on how people are socializing.
Intercoin was launched in 2017 with the same vision – work with communities to release their own local payment network, and help gradually onboard all the merchants, citizens, and visitors. This would let people pay local merchants, receive a Basic Income, finance community projects, and support the local economy. Meanwhile, the community would get statistical reports on how money is flowing.
Roadmap for Rolling Out Voluntary UBI
There is a series of steps a community can take, to gradually implement a local UBI, one which is both voluntary and sustainable, and supports the local economy. This can be done by a town, a university, or even an online community.
Step 1: Issue their own currency. The protocol powering this currency must be able to scale to handle unlimited everyday transactions between people, even as money velocity goes up. Ideally, it should have no bottlenecks, like mining a block. Let citizens and visitors obtain this currency by depositing cash with local ATMs, banks and currency exchangers which will load it onto their digital wallets and payment cards via QR codes.
Step 2: Get merchants to accept it. Tell local merchants about a new town currency that they will be able to cash out for 90 cents on the dollar through the town’s exchanges/gateways. People will be showing up with this currency, ready to buy things. Merchants who are ready to accept this currency will get to put a sign in the window and get more business.
Step 3: Sell the currency at a discount. Let locals and visitors obtain the local currency at a 5% discount, to give them an incentive to obtain it. The local currency’s value will be stable and pegged to the federal fiat currency, or to a cryptocurrency like ITR or BTC if your national currency is experiencing hyperinflation. Your town takes $100 and sells 105 local credits, which merchants must accept as payment for $105 of goods and may cash out for $94.50 .
Step 4: Circulating the currency. Since local currency holders would take a 10% hit every time they cash out the local currency, everyone will be motivated to push others to accept this currency. (In economics, this is called Gresham’s law.) Merchants will be motivated to hire and keep local employees who accept some or all of their salary in the town’s local currency. These employees may get a 5% raise, or simply beat out employees who refuse to accept the local currency.
Step 5: Voluntary UBI Fund. The previous steps have built up more organic demand for the currency, and caused it to circulate within the community rather than being cashed out. Now, the town’s residents can begin to receive a Basic Income, from having more money being minted into circulation, and distributed to every recipient automatically. A fund is set up by the town, or the university’s donors, to act as reserves for cashing out merchants and others.
Step 6: Taxes and Fees The town can now implement transaction fees, and taxes, which remove local currency from the economy, and thus reduce their liabilities and the amount of reserves they need to keep. By operating the payment infrastructure, the town can collect 1-2% on each transaction, and also begin to collect another 5% in sales tax. Here, “collect” actually means “take out of circulation”, to counteract the money printing on the other side.
(Modern Monetary Theory views the role of taxes as removing money from a fiat economy. Already in 1984, the Grace commission report found this was the case for nearly all income tax in the USA.)
Sustainability
For “sound money” that people can trust, most banks keep fractional reserves, but communities launching their own currencies are going to start out keeping full reserves to redeem every coin issued, exactly in the manner promised, even though this might be overkill in practice.
Already in steps 2 and 3, the town had to only keep 90% or 94.5% reserves, respectively. Since there is a lag between a coin being issued, being spent at a merchant, and being cashed out, they have to keep even less reserves.
This 10% “exit tariff” continuously motivates all coin-holders to spend it locally rather than take a loss cashing it out. Thus, the coins increasingly circulate in the local economy, supporting local commerce, but also increasing the lag of an average coin being cashed out, sometimes by 10x or more. As a result, the community can begin to keep fractional reserves, which can become smaller and smaller as as less and less coins are cashed out at any given time.
Finally, as taxes and fees are introduced in the local economy, the community can start to issue a Universal Basic Income in its own currency, without causing inflation.
Various taxes can be organically introduced, including sales taxes, land taxes, and pigovian taxes on things like pollution, fossil fuels, meat or cigarettes. By redistributing taxed money equally to everyone, this can align public incentives with taxing these negative externalities, and avoid them falling disproportionately on the working class, as happened with the yellow vest protests in France.
As demand for the local currency (and thus local real estate and services) grows, so does the town’s ability to tax various transactions. The town’s citizens could be given the ability to democratically vote on the level of taxes, and thus the level of UBI, they want to receive.
Thus the town can have both sound money and true democratic control of its fiscal and monetary policies, all the while becoming more self-sufficient and stronger. Any town will be able to introduce a local UBI to end food insecurity, improve health outcomes, reduce dependence on means-tested welfare programs, and so on.