In our solution, fiat pegged cryptocurrencies are called “Moneta”. All Monetas will initially be issued on the blockchain, so they exist as a cryptocurrency token. Each Moneta unit issued into circulation is backed in a one-to-one ratio (i.e. one Moneta USD is one US dollar, one Moneta UAH is one Ukrainian Hryvnia) by the corresponding fiat currency unit held in deposit by Moneta Holdings.
Monetas may be redeemable/exchangeable for the underlying fiat currency pursuant to Moneta Holdings terms of service or, if the holder prefers, the equivalent spot value in any other cryptocurrency. Once a Moneta has been issued, it can be transferred, stored, spent, etc. just like any other cryptocurrency.
The fiat currency on reserve has gained the properties of a cryptocurrency and its price is permanently monetized to the price of the fiat currency. Our implementation has the following advantages over other fiat pegged cryptocurrencies:
– Monetas exist on the blockchain rather than within closed source software running on centralized, private databases.
– Monetas can be used just like bitcoins, i.e. in a p2p, pseudo anonymous, decentralized, cryptographically secure environment.
– Monetas can be integrated with merchants, exchanges, and wallets just as easily as Bitcoin or any other cryptocurrencies.
– Monetas inherit the properties of the Layer protocol which include: a decentralized exchange; browser based, open source, wallet encryption; blockchain based transparency, accountability, multi party security and reporting functions.
– Moneta Holdings employs a simple but effective approach for conducting Proof of Reserves which significantly reduces our counterparty risk as the custodian of the reserve assets.
– Moneta issuance or redemption will not face any pricing or liquidity constraints. Users can buy or sell as many Monetas as they want, quickly, and with very low fees.