Create two fiat currency banks in Puerto Rico that operate with both fiat and decentralized crypto c

John Congdon

New Member
May 24, 2017
20
8
3
76
Using the fractional reserve system of the legacy banking industry seems antithetical to what crypto in general, and Dash in particular are trying to achieve. It's using leverage and debt to spend more money up front than we would otherwise be able to do. We literally have more money in the Treasury than we know what to do with right now, and it looks like the Dev team and the Masternodes are struggling heroically to grow and expand in a sensible and efficient manner. Suddenly having another 12 million debt backed dollars to throw at the world would only exacerbate that problem.

Plus, the ability to do this in a way that prevents the possibility of abuse seem problematic in the extreme.

I would have to vote no with my two MN's.
As I mentioned previously, I can understand negative feelings about fractional reserve (FRB) as I harbored those for a long time. However I realized a couple years ago that that system has been a very progressive influence in society and creating expansion of opportunity. The very positive aspect of FRB is in creating and managing a workable credit system. The problem has been with who has been in control of FRB along with the high cost of how its has been applied and who has benefited.Initially it has been used to give power to the rich or money powers and secondly to politicians at the expense of the general population. So the gateway to FRB has been through the rich but we can completely change that and that is the purpose of the two banks. I will suggest that you read the accompanying whitepaper if you have not done so.

Using precious metals as a currency placed a lot of burdens on the people whereby an amount of capital needed to be amassed equal to the project that as yet had not been accomplished. Precious metals by definition are a limited asset where as the overall potential of someone to create is wide open. The movement to a credit based money supply gave the opportunity to many people to access their creativity once they had something to show more than wishful thinking. It relieved the burden of needing to amass a difficult to attain supply of capital in order to initiate one's project. That is why FRB has produced a previously unmatched development in the private sector that has lifted the overall standard of living to new heights.

As noted above the dark side, and yes there is a definite dark side associated with FRB, came from those who have had the most control over the system, not the system itself. The first formalization of FRB in 1694 was with the privately created Bank of England for the purpose of financing war and the unwarranted further enrichment of the already wealthy. That type of arrangement has been continuing to this day.

There is an old expression that says it takes a thorn to remove a thorn. We can use FRB to create peace just as well and the world sorely needs that type of development as rapidly as is possible. That is the full purpose of creating the two banks. The overall middle class has amassed a previously unmatched amount of capital. However that capital which is equal to at least $20 trillion in the U.S. alone is currently idle. It is the project of the banks to awaken that capital to be used for bringing peaceful development and abundance to the world.

I do not believe that FRB will be important in the future. As every community is educated in the true wealth that it has FRB will become unnecessary. However we are currently in something of an emergency situation to move out of a war based economy as rapidly as possible. And we still need to develop a currency that reflects overall economic development of all positive aspects needed by communities.
 
  • Like
Reactions: akhavr

akhavr

Active Member
Oct 11, 2014
837
414
133
1. Banks usually are set up under a holding company and the investors own the holding company
Who will be the legal owner of the holding company? I believe (and I would love to be proved wrong) that current financial regulations require the disclosure of the final beneficiaries in every case.

I will suggest that you read the accompanying whitepaper if you have not done so.
Yes, I will go and reread the whitepaper, as I've just glanced over it previously.
 

solarguy

Active Member
Mar 15, 2017
873
430
133
61
I agree 182% with your ideals of encouraging renewable and sustainable energy and agricultural processes. I am intimately familiar with EROEI calculations for corn based ethanol production vs cellulosic (switchgrass and/or forest waste) ethanol. I was writing grant proposals for solar driven vacuum distillation of corn/mash based ethanol in farm sized production units in 1978. (Yes, I was naive back then). I am deeply involved in the permaculture and organic food movements.

I ran our car, truck and tractor and oil furnace on biodiesel that I made from used fryer oil for a decade. I built and operated, what I believe to be one of a tiny handful of successful house scale cogeneration plants that burned biodiesel to make electricity, but captured and used the waste heat for hot water and space heating. It operated at efficiencies that approached 80%, as opposed to the typical homeowner generators that are lucky to attain 25% overall efficiencies.

That's the long way of saying, I get it. I totally get it.

One of your basic premises is that these new Dash banks, will loan money exclusively to this kind of project, renewable energy, restoration agriculture, sustainable housing, etc etc etc. It is an enormously worthy goal.

I am unconvinced that there are sustainable cellulosic ethanol models, if they account for soil loss, and full and proper energy invested/energy returned analysis. However, I am open minded that there could be improvements to the point where switchgrass or sugar cane could be grown and converted to ethanol in ways that are legitimately renewable and regenerative.

BUT, I would have to see the data.

Further, I am still unconvinced that Dash could do fractional reserve banking in a way that uses loans/debt in a way that benefits all parties involved. The renewable energy movement is littered with failed projects that just never lived up to the optimistic efficiency and mass adoption projections. That is risk for the owners of the banks. And, there is still risk to people who borrow the money. Debt always comes with risk attached. Your kind of debt -may- be better and less risky than the legacy banking system, but it is still debt with risk.

What does the bank do if the project turns out to not be profitable? Do we foreclose? Do we take the houses away from the borrowers? Do we sell the assets of the ethanol plant for pennies on the dollar? I always like to have a plan for the best case scenario, but I also -must- have a plan for the worst case scenario as well. What happens if the banks are not profitable because too many of the loans fail?
 

Biltong

Active Member
Mar 22, 2017
363
134
113
Dash Address
XmPNBEQyaVNyFudWL3hhhcWfkdYK6T9nCF
Proposal Evaluation Committee

Hi John

Just want to find out if you are planning to submit your proposal officially, i.e. Pay the 5 Dash to submit it?
If so, do you agree to the PEC (Proposal Evaluation Committee) assisting you in preparing your Pre-Proposal?

The way we do it is to give a Report on your Proposal highlighting areas that you can improve.
As you improve the Proposal the Report is adjusted and this may be done a number of times (up to 5 or more), each time the chance of your Proposal being accepted by the MNO’s will increase.

The Report also has another function:
To give the Pre-Proposal a percentage mark. This percentage will make it possible to give the MNO’s and community a prioritized List of Evaluated Proposals. This list will save everyone time and increase the chance of your Proposal gaining votes.

However, please be aware that the PEC has not officially been accepted by the MNO’s. We are also in the Pre-Proposal phase, so you have no obligation to partake.
If you want to know who will be doing the Evaluations – see here: Official PEC Pre-P https://goo.gl/qrbeXK

If you do want to use our services (note this is a free service)
1. Please PM me on the Dash Pre + Budget Proposal Discussions Forum indicating agreement.
2. and if you have not done this yet, please read: How to submit a Dash Pre-Proposal https://goo.gl/7jmwXQ
3. Once you have read it you might want to adjust your Pre-Proposal before we submit the 1st Report, so I will wait for you to give us the go-ahead before we start the evaluation process.

If you don’t want the PEC to evaluate the Proposal – please PM me as well, then I won’t bug you again for an answer ;)

Good luck with your Proposal!
 

John Congdon

New Member
May 24, 2017
20
8
3
76
Who will be the legal owner of the holding company? I believe (and I would love to be proved wrong) that current financial regulations require the disclosure of the final beneficiaries in every case.



Yes, I will go and reread the whitepaper, as I've just glanced over it previously.
Puerto Rico regulations say that one must submit an investor profile for investors that will own 10% or more of the financial entity. The territory of Puerto Rico is who is granting the bank license not the US government, that is to say that it is not a US national bank. There are both state banks and national banks and in this case territorial banks. The bank will need to meet all reporting requirements on transactions and KYC regs for account holders. This is a subject that can be run by lawyers but I very much doubt it will be necessary for all owners. For example the majority of banks are publicly owned. If someone buys stock in B of A, Chase, or Citi corp which is done everyday I can't imagine that there are any special reporting requirements. For major holders, such as over 10%, yes I can understand that. When I have some time I can read those reporting requirements due to federal legislation. There's a couple things to remember, one is that the US government is probably the biggest money launderer in the world, there are a number of reporting loopholes. If one owns up to 49% of an overseas business entity there are no reporting requirements to the IRS. Also your wording "final beneficiaries" applies to IRS trust regulations and estate planning rather than to legislated entities such as corporations, partnerships, LLCs, LLPs, etc. Legislated entities are very direct about who are the owners.

The shareholders will be the owners of either the bank or the holding company. As to which that will be will depend if it is prudent to have a non-profit be the holding company in which case I don.t believe that a non-profit can have shareholders. In all regards whoever is investing in the project will have direct legal ownership in which ever entity is needed to have ownership.The whitepaper goes into more detail about the management system for the bank if that is also your interest.
 
Last edited:
  • Like
Reactions: akhavr

Biltong

Active Member
Mar 22, 2017
363
134
113
Dash Address
XmPNBEQyaVNyFudWL3hhhcWfkdYK6T9nCF
Forgot to mention: We’ll be doing Reports on all Pre-Proposals in any case – towards the end of the cycle. ;)
 

Leonidas

Active Member
Oct 22, 2016
395
142
113
Hi John,

Here is your first report,

PEC Report Leonidas and Semarg for John Congdon - Evaluation 1 v02 - checked.png


Couple of notes :

  • There is NO pass/failure mark. The percentage simply allows us to create a Prioritized List of Evaluated Proposals. The idea being that a MNO with very little time can concentrate on Proposals at the bottom of the list only. MNO’s with more time will obviously look at all proposals as per normal
  • The evaluation also enables the Evaluators to look for scammers etc and red-flag a proposal that is a possible danger to Dash. They have more time and tools to look for the tell-tale signs.
  • How did the Evaluators decide on marks: PEC Evaluator Guidelines https://goo.gl/Futw1d
  • MNO’s have been very lenient in the past. So even if you have, what you might consider a low mark, you might still pass the Vote ;)
  • Most Important: The evaluation is to give you an idea of where you can improve your proposal to have a better chance of earning MNO votes.

When you improve your proposal, please color all new material in red and don’t delete any word/sentence, but use strike through or underline. This will make it easier for the evaluator to find changes, when she or he re-evaluates your improved proposal. The MNO’s will also so be interested to see what you changed to improve your proposal.

Since you were unlucky enough to submit your Pre-Proposal just as the PEC started, you had a handicap: You did not know the importance of the Dash Project Proposal Template https://goo.gl/m0jgfS .

This Template was created some years ago by the MNO’s to get all the information that they need to make an informed decision. It is also the easiest way for you to earn extra marks ;) If your proposal did not cover a question in the Template – just put the Heading and answer in your detail doc. If your proposal does cover the question: Just put the Heading with the words: See original Proposal.
E.g.: Project Scope - Milestones and Schedule: See original Proposal.

We know this is a painful bureaucratic exercise, but once you’ve done your improvements for this 1st one, the next couple of improvements (maybe just one?) will be easy, and of course – you are bound to have more proposals in the future!

Good luck