Despite major innovations within the fintech industry, there currently exists no programmable, ‘smart money’ digital representation of national currencies. ARYZE is building this in the form of “Digital Cash”, a currency with all the familiarity and practicality of existing national currencies with all the programmability and dynamism of cryptocurrencies.
As discussed in the previous article in this series, ARYZE is creating a full-reserve cloud-based banking system. Doing so will allow us to mitigate the risk associated with lending-based banking, and will also enable us to digitalise the world’s currencies with full knowledge on how much digital money is in circulation. Digitalising the world’s currencies will solve several major problems and optimize money usage.
Physical cash has several important limitations, which are especially prevalent in our increasingly digital and globalised world. Physical cash cannot be sent or spent internationally without the help of multiple intermediaries, often taking days or even weeks and costing significant sums to reach its final destination. Paper money can be easily lost or stolen without a trace; that untraceability also facilitates money laundering and financial crime. Finally, physical money is of limited utility, as it cannot be programmed the way that cryptocurrencies can be into infinite services and offerings.
Digital money solutions have the potential to address these problems, yet no optimal solution exists as of yet. Tokenization, or the transfer of “real world” assets to a blockchain, is a growing trend in blockchain-based finance. However, there has not yet been a smart money digital representation of existing national currencies. Stablecoins have the potential to significantly transform the payments industry by offering a modern smart-money solution without all the volatility of cryptocurrencies. Despite this, existing fiat-backed stablecoins that are available on open-source networks like Ethereum are still backed by traditional banks, and therefore carry the same risks.
A different kind of digital currency
ARYZE’s Digital Cash is designed to mitigate those risks and maximise utility. We are creating a currency with all of the practicality, stability and recognisability of existing fiat currencies that is as dynamic, programmable and flexible as cryptocurrencies. Says ARYZE CEO Jack Nikogosian:
It’s about building a bridge between the world of regulated money and the world of open source, programmable money. Whatever intermediaries lie in between could go away.
Because Digital Cash is an exact digital replica of national currencies, there is no steep learning curve for our end-users. Our services are familiar enough to be widely adoptable, but transformative enough to make real improvements to the financial sector. Digital Cash is secure, recognisable, interoperable and programmable. Says Nikogosian:
In this vast universe of products and opportunity with blockchain tech, ours is boiled down to something particularly simple yet complex in nature, by definition. That is to create the digital version of something we all know, which is cash.
How does it work?
In order to create a digital representation of existing currencies, our Digital Cash has to be backed up one-to-one with the currencies it represents. The only way to ensure that a digital dollar is equal to a physical dollar is to remove bank risk; this will allow us to know exactly how much Digital Cash is in existence and in use. Therefore, ARYZE is creating a cloud-based banking infrastructure which will not facilitate any kind of financial speculation, and where Digital Cash is backed one-to-one within the central bank of the corresponding currency.
Digital Cash is the digitized representation of sovereign currencies operating within our network and beyond. RYZEnet, the tech-stack that comprises our cloud-banking network, is based on a microservices architecture, enabling the platform’s features to be managed and updated easily. This means that to build RYZEnet, we are working with various providers, ranging from banking software companies and data-centers to regulatory firms specialising in regtech and compliance. Our network, then, consists of various components that are combined to form the basis of a regulated banking environment.
Using cloud-native banking software, we easily facilitate interactions with traditional banking systems. Once funds are deposited into the underlying banking system, ARYZE issues a representation of the money to the user’s account.
What can it do?
With truly agile and programmable money, the possibilities are endless. Digital Cash can be sent instantaneously around the world at no cost. Not only do we believe that digital money should be borderless, we believe it should be usable beyond the limitations of ARYZE’s own digital financial tools and services. By buying a developer license, individuals will be able to use Digital Cash to create financial solutions that will be hosted on our MAMA app. This way, they will not be limited to the services ARYZE conceptualises, but can make their own solutions to any perceived market demands.
Further, Digital Cash will be available for use outside of ARYZE’s systems. Open-source projects like ethereum allow developers to create new solutions on a public and distributed payment network. Digital Cash will be interoperable with most popular third-party blockchains, so that users can issue electronic versions of sovereign currency, with no credit risk, onto their preferred systems. When 100 USD is transferred to an ethereum wallet, our engine issues 100 E-USD to the wallet address provided, allowing developers and blockchain enthusiasts to program our money. This will enable people all over the world to build their own digital financial solutions and Dapps without ever becoming direct clients to ARYZE or using our digital products.
Said differently, we want to provide the liquidity pool that they can use to make their own systems more efficient. That’s our plan, being the facilitators, in some cases behind the scenes. (Nikogosian)
In sum, Digital Cash is money as a microservice that developers can seamlessly build into products and solutions. The goal is to make genuinely programmable money in an ecosystem that is agile and adaptable with the financial industry. By digitizing cash with a one-to-one backup in the corresponding central banks, we ensure that our financial tech platform can facilitate security, innovation and inclusion for years to come. ARYZE’s systemic flexibility also means that Digital Cash can also interoperate between different financial infrastructures. This has major implications for anti-money laundering efforts and customer banking experience. To read more about this, please read the next article in this series – coming up soon.