Chapter 4 UNIT: The Possibility of Currency Design Excluding Politicality
The UNIT White Paper presents a currency design that is a revolutionary attempt to fundamentally redefine traditional currency concepts. Its core lies in the concept of a "fractal currency ecosystem," which applies Mandelbrot's fractal geometry theory to currency systems. Through a self-similar structure where each node contains a scaled-down version of the whole, it aims to build a currency system that does not require a centralized issuing authority and is independent of political control. (However, it should be noted that as of 2025/06/14, there is no fact that UNIT has been adopted as a BRICS common currency.)
The first feature of UNIT's innovative design is the combination of a basket currency and gold backing. It is stated that "each UNIT token represents a share in the UNIT reserve basket, which consists of 40% gold and fiat currencies freely convertible into gold," and this composition achieves resistance to political fluctuations. The 40% gold ratio refers to the debates at the time of the establishment of the U.S. Federal Reserve in 1913, and is based on the idea that "to make notes absolutely good and impregnable, it is better to have too much reserve than too little."
The innovation of this design philosophy lies in its technical implementation of Hayek's theory of denationalized money. While Hayek questioned whether gold was a good standard for the purpose of currency, he pointed out the need for a "stable standard in purchasing power." UNIT incorporates this insight, designing a currency that uses gold as an "anchor" while not being dominated by it. Through the basket composition, it achieves value stability independent of the political fluctuations of any single currency.
The second feature is the principle of non-redeemability. It is stated that "there is no mechanism to convert issued UNIT tokens back into the basket of gold and currencies," which prevents TARGET2-type imbalances. While this design may seem paradoxical at first, by focusing on the role of a medium of exchange, which is the essential function of money, it eliminates political speculation and artificial manipulation. The value of UNIT becomes "primarily a function of supply and demand," realizing pure price discovery through market mechanisms.
The third innovation is the decentralized issuance system based on a fractal structure. It is stated that "new UNIT tokens can be issued (or minted) at the UNIT node level without the need for constant coordination between the issuers of the underlying currencies," technically realizing the absence of a central issuing authority. Each node holds a scaled-down replica of the whole and can issue new UNITs as needed. This is a revolutionary change that can be called the democratization of the right to issue currency.
Fourth, the principle of sovereignty retention is incorporated into the design. It is stated that "gold never leaves sovereign borders, and these risks are mitigated," allowing participating countries to participate in the international settlement system while keeping physical gold reserves within their own countries. This is a technical solution that enables both monetary sovereignty and international cooperation. Given that there have been multiple cases in the past few decades where gold deposited with foreign central banks was not returned, this design technically resolves the concerns of participating countries.
The fifth feature is the avoidance of the "impossible trinity" problem. According to the Mundell-Fleming trilemma, it is impossible to maintain a fixed exchange rate, independent monetary policy, and free capital movement simultaneously. The UNIT system technically avoids this constraint by "not forcing participating governments to abandon monetary policy, no matter how restrictive they may be." By using UNIT for international settlements while maintaining independent monetary policies, countries solve the trilemma.
UNIT's transparency mechanism is also an important feature. It is stated that "the exact composition of the UNIT basket is public information at all times and is broadcast by all UNIT nodes," ensuring complete transparency. This is in contrast to the opaque decision-making processes of traditional central banks and international financial institutions. Transparency allows market participants to make decisions based on sufficient information, eliminating unfair profits due to information asymmetry.
The design of the basket rebalancing mechanism is also excellent. With the constraint of a 40% gold ratio and a 30% cap on other components, the system can maintain stability while flexibly responding to market changes. It is stated that "there is no need to rebalance gold bullion between UNIT nodes at all," achieving both efficiency and safety. Rebalancing is performed only on the currency portion (non-gold portion), minimizing operational costs and risks.
The decentralized autonomous organization (DAO) structure of the UNIT system technically guarantees independence from political control. It is stated that it "functions as a non-profit auditing body based on the principles of international law and is not governed by the financial regulators of any nation," presenting a new model of supranational governance. This is the realization of technical governance, enabling objective operation that excludes political arbitrariness.
The design of the incentive structure is also clever. Exporters can solve the problem of "accumulating large positions of local currency as a result of bilateral trade," and importing countries can "minimize the risk of destabilizing the currency used to pay for imports and causing chaos in the domestic money supply." This is a design that technically solves structural problems in traditional international trade.
The design philosophy of UNIT indicates a fundamental change in the concept of monetary sovereignty. While traditional monetary sovereignty was an exclusive and monopolistic concept, the UNIT system allows countries to achieve international cooperation while maintaining the independence of domestic policies. This is a paradigm shift that can be called the non-zero-sum nature of the concept of sovereignty.
Through this design, UNIT has the potential to function as an "essentially non-political currency." Through the technical exclusion of political intervention, the guarantee of transparency, decentralized governance, and the utilization of market mechanisms, a path is shown for currency, which has been a political entity for thousands of years, to shed its political nature for the first time. This is a revolutionary design that could become a fundamental turning point in the history of currency.