Implementing the Business Exchange Value Note (BEVAN) as a complementary currency to facilitate trade and commerce in conditions where credit is being restricted by the banking system.
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1. There are two prime objectives in establishing this system. The first is to provide an efficient means for commerce and industry to survive and prosper in a hostile economic environment where credit and the money supply is being restricted by the banking system. The second is to build into this system protection against fraud and misuse.
2. BEVANs will become a form of currency, but restricted to companies and other business and trading entities for use among and between themselves for settling bills and accounts.
3. In contrast to currencies, BEVANs will not be fiat paper money with no basis in wealth. On the contrary, they will be based on the amount of wealth that each participant can produce over the 12 months following their participation in the system.
4. BEVANs will be used exclusively as a means of exchange. It is not intended that they should be bought and sold or used as investment vehicles or for speculation. They will be complementary to the national currency in any country in which they are adopted, and they will be priced in terms of that currency. The amount of BEVANs credited to each participant at the time of joining the system will be based on the estimated value in terms of national currency of the goods and/or services to be supplied by the participant over the course of the following 12 months.
5. There is no need for BEVANs to exist in note form (in spite of their name). It may be necessary or desirable at a later stage to print a certain number of notes, but in the early stages of this system they should exist only in the databases of the participants and the Administering Authority (AA).
6. The AA should have a small national office purely to administer the regional AAs (RAAs) and the central database and accounting system. It should mainly consist of RAAs that work under the wing of either Chambers of Commerce or, in the UK, Business Link. It is important to localise as far as possible the administration of the BEVAN scheme to capitalise on local knowledge of commercial and industrial enterprises, and to avoid as far as possible fraud and deception.
7. All participants will have software that will be used to transfer out and receive in BEVANs. This will connect to a central database at the AA and operate in the same way as a bank’s online account facilities.
8. Participants will be able to use BEVANs between themselves to settle accounts. They will receive them from other participants as payment for goods or services, and they will pay them to settle amounts owing to other participants.
9. BEVANs should be freely convertible into the national currency and this should easily be possible provided the government gives a guarantee. There is no reason why this guarantee should not be provided as it will not cost the government anything. The government itself will be able to make payments due to businesses, e.g. tax repayments, business grants, in BEVANs that it has received, such as in tax payments.
10. It may be advantageous in due course to print BEVAN notes and allow these to replace a similar value of BEVANs in the accounts of participants. There should be no real problem encountered if this is done. The Royal Mint (in the UK – the Treasury Department in the US) will simply print off the required number and value using the same security measures as applies to bank notes at present.
11. Another possible future development is to extend the use of BEVANs to householders in order to facilitate the purchase of a family house by young couples who otherwise could not afford to borrow the amount needed. The amount of BEVANs a family unit could claim would be calculated on the basis of their current yearly income multiplied by a certain number, probably 10. This money could only be used for the purchase of a house and would be repaid to the AA in much the same way as mortgages are repaid at present. Any amount owing at death would be repaid to the AA in either BEVANs or the national currency. The principles would be exactly the same as apply today.
12. The systems of BEVANs will lead to a rejuvenation of economic activity. Wealth will increase, notably among those people prepared to work for it in return for a fair reward. It will soon be realised that the bank credit emperor has no clothes, that we don’t need loans from banks at exhorbitant rates of interest and that we can and should safely create our own means of exchange.
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Comment and constructive criticism is welcomed on this proposal. Please feel free to post your own contribution to this discussion.
Philip Gegan
5th December 2008
Copyright (c) Philip Gegan 2008