PIP 6 - SDR++ Special Drawing Right

PIP 6 SDR++ Special Drawing Right PIE

Status: Draft

Created: 07. April 2020.

Simple summary:

This is a proposal to crate stable currency which was issued by IMF in 1969. in response to Bretton Woods fixed exchange rate system. SDR represents basket of fiat currencies that are used on global scale and meet IMF criteria of export criterion (currency issued by IMF member state) and freely usable criterion (widely used to make payments for international transactions and exchange markets). When SDR is established, it is reviewed every 5 years (earlier if warranted by MF). During whole period weight fluctuation among currencies can vary but amount of currency that makes basket is fixed. This gives us perfect example to create SDR-PIE what can ensure fiat stability exposure.

SDR – international reserve asset created and maintained by IMF

  • Artificial currency instrument
  • Represents basket of 5 currencies: USD, EUR, JPY, GBP, CNY
  • Reviewed every 5 years (or earlier if warranted by IMF)
  • Used as major element of international reserves (acts as global reserve currency)
  • No SDRi (interest rate charged when countries borrow SDR form IMF)
  • Last review November 2015
  • CNY added in October 2016

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It is expected that IMF will make rebalance of SDR in November 2020 what gives us perfect time to create SDR++ portfolio in this year and rebalance it in ending months of 2020 if IMF sticks to their rule.

Proposal:

  • Ensure all SDR fiat currencies are available in Ethereum ecosystem as synthetic assets or as stablecoins
  • Deploy SDR Pie which tracks above mentioned currencies (all stablecoins plus synthetic assets)
  • Implement tracking weights of currencies in SDR from IMF dataset
  • Using Balancer to rebalance weight of every currency in SDR
  • Currencies:
    • USD = Cash++ pie
    • EUR = STASIS Euro and sEUR from synthetics
    • GBP = Binance GBP and sGBP from synthetics
    • JPY = sJPY from synthetics
    • CNY = ?

At current state we have very small amount of different stablecoins that represent currencies from SDR basket. Missing CNY can (and I hope!) will be added in synthetics products some time in future.

Another approach is to create SDR currency using Balancer Protocol (if this is possible) and make that every 1 SDR currency has fixed number of units of currency that makes them equal to 1 SDR.

Both of solutions presented here are to be discussed since we still have no CNY solution on Ethereum network (as far as I know it…)

More info:

https://www.imf.org/external/np/fin/data/rms_sdrv.aspx

https://www.imf.org/en/News/Articles/2016/09/30/AM16-PR16440-IMF-Launches-New-SDR-Basket-Including-Chinese-Renminbi

https://www.imf.org/en/Search#q=sdr&sort=relevancy

2 Likes

Interesting article about possible IMF actions

Just to put several links that describe difference between CNY and CNH.

https://www.nasdaq.com/articles/cnh-vs-cny-differences-between-two-yuan-2018-09-12

IMO difference is not something that should be a showstopper if we get CNH instead of CNY on Ethereum network. However I am sure this could be easily voted by community and decided should we go with CNH if CNH first emerges in Ethereum network as currency before CNY is on network.

CNHT is developed by Tether crew (https://tether.to/tether-now-supports-offshore-chinese-yuan-cnh-launches-cnht-stablecoin/) but IMO no traction at all. Can’t even find any price discovery for CNH (not on uniswap or etherscan at least…)

It seems that sCNY is not only planned (https://synthetixjs.synthetix.io/scny), but that the related contracts are in fact already live (https://github.com/Synthetixio/synthetix-js/blob/newSynths/lib/addresses.js), not just on the various testnets but also on the mainnet:

1 Like

Ok great!
So this gives us possibility to integrate CNHT and sCNY and imo to try do it with both of them!

Tnx for the info @Mycetism

No problem @ivglavas, hopefully Synthetix will do an official release soon.

What got me interested in DAI in the first place was that it was supposed to be pegged to the SDR currency basket, so I’m especially excited about this particular PIE!

TGBP also (True tokens) exists

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Should we create pools like USD++ for currencies with multiple representations?

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I’d be down for it. It looks like a good path to make this happen.

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I very much like the proposal, and I’m confident its composability would represent a key value on top of the already cool dna of SDR.

As a side consideration, if I’m not wrong https://www.saga.org/ has been recently launching a crypto ($SGA) replicating the currency composition of the SDR. Any info on that?

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Hm did not saw saga project before. Thank you for posting it here @gabo .
However, as I see they use only USD stablecoins on Ethereum and other fiat money in Bank deposit.

This is what makes big difference with SDR++ because in our SDR all assets are underlying the SDR currency with Ethereum assets that represent fiat currencies.

2 Likes