Future work

Fa.cash is actively exploring the possibility of accepting a wider range of collateral types in the future, including real-world collateral such as fiat currency assets and real estate trusts, blazing an alternative central bank path to become the central bank and foremost investment institution for crypto-digital currencies.

As an application on a permissionless network, Fa.cash is inherently market-based and does not rely on the backing of any sovereign.

At the beginning of the project, Fa.cash functions similarly to the Bank of Amsterdam, holding a full reserve of assets and issuing redemption certificates (ibToken). The difference is that instead of precious metals, the Fa.cash vault holds native assets on the blockchain. These two seemingly different products of different times share a similar monetary nature. Both are external currencies, i.e. they do not belong to anyone's debt.

Distinguished from the early days when the Bank of Amsterdam assumed the function of a bill of exchange, Fa.cash plays the role of a pawnshop and is the prototype of the modern repo market. The advantage of the overcollateralisation model is that it does not require the pricing of assets and provides liquidity quickly. Thanks to the consensus mechanism of the blockchain network, Fa.cash does not even require standardised assets and identification of authenticity, only a rough price transmission system and proper risk management.

Despite the diversity of collateral, Fa.cash is only a passive management of collateral. Running a complete monetary system, on the other hand, requires Fa.cash to take on the role of a central bank and investment bank, not just a discount window-like function, but also to stabilise currency prices, respond to internal and external demand shocks and act as a lender of last resort, and to help its clients earn excess returns.

In the future Fa.cash will lend to global property developers in the form of a trust SPV for lease financing. Through a balance sheet overdraft, a new ibToken is issued to the property developer, who will build the site and lease it out to the merchant, with Fa.cash collecting interest as a senior debt. This is a major shift and a natural choice to meet the demands of global trade. Fa.cash will become a money creator, injecting resilience into the system through accumulated credibility, which also starts to give it the shape of a central bank.

In order for a currency to be accepted, a central bank needs to have backing, which includes assets, credibility and sovereignty. fa.cash is also creating, accumulating and transmitting trust - trust that is the cornerstone of running a sound monetary system. This trust comes from the on-chain value network itself, such as proof of work to guarantee the currency's integrity and smart contracts to increase the certainty of transactions, on the one hand, and from the real-world currency issuer's risk control of the collateral, the security of the business logic and the due diligence assessment of the loan originator, on the other. In the future, Fa.cash will blaze an alternative path to central banking, with constraints and innovations around DAO governance. History cannot be reloaded, but new ground can allow the vision to be re-enacted. Open markets and networks like the blockchain once again give alternative central bank currencies an opportunity to experiment, and Fa.cash is at the centre of this experimentation and change.