Singleness of Money refers to the principle that all monetary claims, regardless of their form or underlying asset, should ideally be interchangeable at par without incurring conversion costs or requiring separate accounting treatments. In traditional finance, this implies a unified fungibility of fiat currency. Within the crypto domain, achieving a true singleness of money is a design goal for stablecoins and central bank digital currencies, aiming to overcome fragmentation across various digital asset forms and networks.
Mechanism
The mechanism to achieve singleness of money involves creating interoperable financial instruments and payment systems that eliminate friction in value transfer between different digital representations of value. This necessitates robust technical standards for tokenization, cross-chain communication protocols, and standardized accounting frameworks for digital assets. For stablecoins, it relies on reliable collateralization and redemption mechanisms to maintain a peg to a reference fiat currency, ensuring near-perfect interchangeability.
Methodology
Realizing singleness of money requires a concerted methodology that integrates technological innovation with regulatory harmonization and market adoption. This approach focuses on developing universal standards for digital asset issuance and transfer, fostering liquidity across diverse trading venues, and establishing clear legal frameworks for digital currency recognition. For crypto systems, it means designing protocols that minimize arbitrage opportunities between different forms of digital money and ensuring consistent valuation and settlement practices across the ecosystem.
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