CONFIDENTIAL (RED) / EYES ONLY GLITTER TARNISH
Welcome, operative of the Imperial Exchequer.
If you are reading this document, it is because you either have need to know for, or have independently discovered, the weaponizability of the currency validation system.
To recap: the modern esteyn possesses full verifiability against counterfeiting, since every individual currency unit possesses an embedded cryptographic signature incorporating its denomination and serial code. This applies to both physical currency, in which this signature is embedded in v-tag format, and to money of account; an esteyn-denominated account must record not only the quantity of money contained therein, but the unique cryptographic signatures of each esteyn-unit stored. In either case, such units can be verified as genuine by an authentication exchange conducted across the Imperial Banking & Credit Weave.
We retain the ability to generate new cryptographic signatures and to invalidate old signatures at will. This latter facility is used principally by the Office of the Mint when replacing worn-out, damaged, or lost physical currency, and by the Office of Currency and Values, when adjusting the total money supply (i.e., to draw down the money supply, the OCV invalidates the signatures of selected esteyn-units presently in the general account of the Exchequer).
The realization you may have come to is simply that we do not require possession of a group of esteyn-units in order to invalidate their signatures; we merely require their serial codes. As such, we can invalidate any quantity of esteyn, anywhere in the galaxy “by remote control” – revoking its status as legal tender and a store of value, and rendering it useless in transactions anywhere in the legitimate economy.
This capability has never been used.
It is conceivable that one day we may receive an executive order to weaponize this functionality for use against terrorists, slavers, rogue polities, criminal organizations, or others misusing Imperial currency. It is, naturally, far more flexible than seizure of accounts (possible in Imperial banks or those of close allies only) or transactions (which requires that said transaction clear directly through the Imperial Banking & Credit Weave) inasmuch as it can revoke any esteyn-units, even those instantiated as physical cash. For these reasons, we retain the technical capability.
However, the projected economic effects of exercising this capability would be very severe. Much of the galactic market can be modeled as imperfectly trusting, irrational, and/or panic-prone, and the use of this capability would undoubtedly lead to an immediate external market crash, extending into a medium-to-long term depression. As a matter of policy, the Exchequer considers this a circumstance to be sedulously avoided.
As a final note, while the existence of this capability is not a secret (note the classification level of this document) since it is readily comprehended by anyone who makes a sufficiently adequate study of the relevant public protocol definition documents, the Exchequer chooses not to advertise its existence widely in the sight of economic knowlessmen. As such, you should consider it sensitive data, not for casual public dissemination.
Which is exactly why fiat money, despite it’s many advantages (mostly to economists, bankers and politicians), can never be fully trustable. It’s called counterparty risk and Imperial Board of Money and Values should be especially aware that there are things that, as R.A. Heinlein once put it, you cannot trust even yourself with. Still, it is an imperfect universe.
Also, I personally suspect that given the …shall we say robust attitudes of IBMV personnel, as noted elsewhere, would mean that it would take truly extreme circumstances to trigger the use of this weapon. Minor naughtiness like terrorism, slavers, rogue polities or even major war would not suffice. We’d be talking about matters that more probably fall into Fifth Directorate territory.
And to expand on this: Given that fiat currency essentially creates an implicit contract between the issuer and the bearer that the former will always back it as a measure of exchange value, and taking into account how seriously the Empire and its government takes contract integrity, I’d imagine that there would still be situations where its use would be nigh-unthinkable in most circumstances that the Imperials could get away with it from a purely economic standpoint.
While the IBMV have never formally requested a legal opinion on this point from the Curia, the informal one would point out that what the Imperial Charter actually says is “The Empire shall establish a single unit of exchange to use in commerce between the nations of the Empire and with those beyond its borders, and this shall become the base for the coin, currency and values minted by the nations of the Empire, which shall have with it an absolute relation.”
One might extrapolate from there to say first that “in commerce” is functionally a short form of “in consideration of contracts”, and second that the legal if not ethical standing of all contracts is based on the Fundamental Contract, and conclude that while the Exchequer therefore has an ethical, moral, and legal obligation to uphold the value of its currency in general as a matter of the obligation of contract, in specific cases where currency units are being used for the purpose of violating the Fundamental Contract (rather than mere statute or case law), such behavior constitutes a repudiatory breach of the currency-provision contract and as such they have no obligation to uphold the value of that specific chunk of currency.
I mean, they don’t, because it’s never been the case that the game is worth the candle when it comes to weighing the gain from doing so against the reputational damage it would do to the IBMV and the esteyn. But their legal grounds for doing so might be pretty solid.
Y’know, technically. If anyone with standing were to ask.
Which leads me to a question that’s a little tangential to the original post, but in one form or another has been haunting the back of my mind for a while: Would a contract where one party waives their rights under the Fundamental Contract as part of their contract obligations — and does so voluntarily, and not through fraud, duress or coercion — in lieu of the other party’s discretion be considered a valid contract? (For the moment, let’s ignore whether it would be moral to draw up such a contract in the first place and assume that the relationship is already a fait accompli.)
Or, to put it another way: Can a mentally and morally competent soph willfully choose to surrender their right to choose?
Well, yes. It’s not the best option for running a fully general currency, the IBMV would agree. It’s just the only option.
Although where trust and the IBMV are concerned, their reputation is “not from gossip… [their] reputation is fact. Is solid.” Much like the Curia, they’ve long since earned the regard they have for being as reliable, predictable, and unchangeable as the celestial spheres – which is why they’re so very chary of anything that might break it.
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Coming back to this post for a moment: It strikes me that, while maybe the Empire themselves wouldn’t ever do such with the esteyn for reasons of their own, the same basic capability carried over to private or semi-public complementary currencies might serve as the foundation for a demurrage mechanism.
(See also: http://www.arbitragemagazine.com/features/miracle-town-worgl/ , which is what I was reading when the thought to link the article’s idea to this one hit.)