Credit in the C2C Monetary System

What is Credit in the Credit-to-Credit Monetary System?

In the Credit-to-Credit Monetary System, credit represents the right to receive a monetary sum from a debtor based on existing receivables or assets. This foundational concept underpins the issuance of Money—such as Central Ura and Central Cru—ensuring that all issued money is tied to real economic value, distinct from fiat-based monetary systems. Unlike fiat currencies, credit in this system must be fully backed by tangible assets or receivables, establishing stability and avoiding inflationary risks.

1. Definition of Credit

In the Credit-to-Credit Monetary System, credit is the contractual right that entitles a creditor to a specified sum from a debtor. This includes existing receivables, contractual obligations, or tangible assets such as gold. Importantly, the issuance of money within this system is tied to valid credit that is fully backed by assets, preventing over issuance and safeguarding against the devaluation risks common in fiat systems.

2. Credit as the Basis for Issuing Money

Credit serves as the core foundation for issuing Money within the Credit-to-Credit Monetary System. For instance, the issuance of Central Ura or Central Cru is backed by a basket of receivables and assets. This means that money in circulation is not arbitrarily created but is grounded in real, existing credit. Assets such as receivables owed to governments or corporations—like taxes, fees, and contractual payments—are used to back the money.

3. Differences from Traditional Credit in Fiat Systems

In traditional fiat systems, central banks can issue money without directly tying it to tangible assets, leading to inflation and reduced purchasing power. By contrast, the Credit-to-Credit Monetary System ensures that all credit is backed by real assets or receivables, anchoring money creation to actual economic value. This helps prevent inflation and preserves stability in the financial system.

4. Credit for Sovereign States

In this system, sovereign states can incorporate their existing receivables (such as tax revenue, state-owned enterprise earnings, and other financial assets) into the basket of reserve assets used to issue credit-based money. This process transforms a government’s role from the debtor of last resort (common in fiat-based systems, where states issue debt) into the assignee (creditor) of last resort.

These receivables and other credits owed to the state are then added to the reserve basket, which forms the basis for issuing money such as Central Ura. The value of this credit is then measured in terms of grams of gold, providing a stable, asset-backed foundation for the currency issued.

Key Implications for Sovereign States:

Measured by Gold: The total value of credit in the reserve basket is measured by how much gold (in grams) it can purchase. The domestic currency, or Domestic Money, that the state issues will be limited to the total value of credit held in this reserve basket.
Issuance Limited to Reserve Assets: A nation cannot issue more money than the value of the assets in its reserve basket. This rule prevents inflationary over issuance, ensuring that the money in circulation is always backed by real economic value.

5. Credit Measured in Terms of Grams of Gold

A key innovation in the Credit-to-Credit Monetary System is that credit is measured in grams of gold. By doing this, the system aligns the value of money with a historically stable and reliable store of value—gold.

1 credit in the Credit-to-Credit system is equal to 1 gram of gold, or the London Bullion Market Association (LBMA) price of 1 gram of gold in USD.
For example, if 1 gram of gold is valued at USD 80.35, 1 credit is equivalent to USD 80.35 in purchasing power.

This measurement ensures that credit remains stable and is protected from the devaluation and inflationary pressures that fiat currencies experience. By linking credit directly to a tangible asset like gold, the system ensures that money issued under the Credit-to-Credit Monetary System retains its purchasing power over time.

6. The Urgency for Transition to the Credit-to-Credit System

Mounting National Debts and Inflation

Many countries today operate under fiat currency systems, where governments issue money without backing it by tangible assets. This has resulted in mounting national debts and inflation, with fiat currencies steadily losing purchasing power. By adopting the Credit-to-Credit Monetary System, states can shift from debt-based issuance to a system where all money is backed by real assets like gold or receivables, ensuring long-term financial stability.

Creating an Environment for Credit-Based Money

Governments are encouraged to create a conducive environment for institutions like National Central Ura Banks (NCUBs), National Central Ura Investment Banks (NCUIBs), and local entities like Central Ura Banks (CUBs) to operate. These institutions trade in Central Ura, Central Cru, and other national currencies linked to the Credit-to-Credit system. Nations should avoid borrowing and instead facilitate the inflow of credit-based money to strengthen their economies. Encouraging the flow of Central Ura and Central Cru will increase the availability of stable, asset-backed money while reducing reliance on borrowing and debt-based issuance.

Protecting Purchasing Power

The transition to the Credit-to-Credit system, with credit measured in grams of gold, preserves the purchasing power of both the currency and credit. In times of economic uncertainty, having a currency anchored to real, stable assets ensures that individuals, businesses, and governments can trust the value of their money.

Conclusion: A Strategic Shift to Grams of Gold for Credit

In the Credit-to-Credit Monetary System, credit serves as the foundation for issuing asset-backed money. Measuring credit in grams of gold ensures long-term stability, prevents inflation, and protects the purchasing power of money. By encouraging the inflow of Central Ura, Central Cru, and other forms of credit-based money, governments can strengthen their economies, move away from debt-based issuance, and provide a stable financial future.

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