A straightforward explanation of how gold-backed currencies and bonds differ and how they will be transacted in the Global Currency Reset (GCR)
In This Article
- General Definitions and Functions of Currencies and Bonds
- Key Differences Between Bearer Bonds and Registered Bonds
- How Transactions Will Work in the GCR
The Global Currency Reset (GCR) represents a significant shift. This reset involves the revaluation of currencies and bonds backed by gold. Understanding the distinctions between gold-backed currencies and bonds, particularly in the context of the GCR can be helpful in the broader landscape of things.
This article aims to provide a clear and simple explanation of these differences, including the unique characteristics of Bearer Bonds and Registered Bonds, and how transactions will be handled.
General Definitions and Functions of Currencies and Bonds
Currencies are are considered legal tender issued by a country’s central bank or government, with their value tied to a specific weight of gold.
These currencies act as a medium of exchange, facilitating everyday transactions.
Bonds are financial instruments representing a loan made by a person or entity to a borrower, which can be a government, municipality, or entity.
Bonds are used to raise capital and provide periodic interest payments to bondholders. Unlike currencies, bonds return the principal amount at maturity.
Key Differences Between Bearer Bonds and Registered Bonds
To the best of my knowledge, all GCR bonds are Perpetual Bearer Bonds, which have distinct characteristics compared to Registered Bonds:
Bearer Bonds: Bearer Bonds are unregistered, meaning ownership is transferred by simply delivering the physical bond certificate. They offer anonymity to the bondholder but carry a higher risk of theft or loss since possession equates to ownership. Perpetual bonds do not have specified maturity dates.
However, to the best of my knowledge, all GCR bonds do require adequate provenance (history of ownership) that show that the bonds were not implicated in any criminal activity.
Registered Bonds: Registered Bonds are recorded in the name of the bondholder. Ownership is transferred through a formal registration process. They provide greater security against theft or loss but do not offer the same level of anonymity.
Key Differences Between Gold-backed Currencies and Bonds
While both currencies and bonds will be linked to various weights of gold in the GCR, their purposes, issuers, and returns, differ significantly:
Purpose: Currencies are used for everyday transactions, whereas bonds are investment vehicles that appreciate over time.
Issuer: Currencies are issued by governments or central banks. Bonds can be issued by governments, municipalities, and other entities.
Return: Currencies do not provide a return in the form of interest unless held in interest-bearing accounts. Bonds, however, generally provide interest income over time.
How Transactions Will Work in the GCR
In the GCR, gold-backed currencies will be exchanged similarly to traditional currencies, only there will likely be a digital (blockchain) component and/or process involved. [More on the decentralized ledger and payment system in future articles.]
Conversely, bonds will be redeemed rather than exchanged. This means bondholders will receive appreciated rates and the principal amount at maturity, rather than using bonds for everyday transactions.
ALSO READ: Trading Platforms for RV/GCR Bonds and Currencies Explained
In the case of ZIM perpetual bonds, the principle value will come from its gold-backed component along with accrued, underlying interest appreciation. No one really knows what that appreciation factor is.
Since most GCR bonds are Perpetual Bearer Bonds, the transaction process involves the physical delivery of the notes to transfer ownership at the time of transaction.
DISCLAIMER: This article is for educational and entertainment purposes only and does not constitute financial advice. I am not a certified financial or investment advisor. Always seek professional guidance before making financial decisions.
