Alternative system

At present a business legal entity has no ownership rights to the turnover monetary asset, which it uses to pay for its financial obligations under a contract in the production market. I have developed a mechanism of relationship in which the bank is the issuer of revolving funds in the form of an ownership to non-cash money ("certificate").

All payments shall be done with money that is held by the bank that issues monetary certificate by accounting with these certificates. The certificate certifies ownership to non-cash money by the owner of such certificate. Money funds take the form of a nominal non-documentary certificate. The issuing bank shall maintain a register of the certificate for nominal holders in the person of depositaries of executing banks. Depositaries of executive banks open accounts- depot for the holders of the certificate. The issuing bank is an analogue of the central bank for executing depository banks. So the banks build new inter-bank relationships for turnover of the monetary certificate. Any bank may become an issuing bank. It depends on whose client is the buyer of the end product in the production market. The right to issue monetary certificate has the bank, which pays with the certificate for the contract of delivery of end products. The issuing banks carry out among themselves all accounts and offsets. Total amount of financial liabilities of the banking system is reduced. Banking financial liabilities become depository obligations that serve production market. It is beneficial for the banks because they receive income from servicing commodity turnover. They become interested in the growth of trade. As the turnover grows, living standards in the economic system also grow.

Thus the monetary certificate reflects the revolving bank asset and the cost of end product. An exchange of monetary certificate for the financial obligation (transfer to the owner’s bank account) is allowed only in the amount of the costs of the current value added tax and the owner’s due taxes. Dynamics of costs` changes have a regular order, and the expenses are carried out only after a prior notification of the curator of the issuing bank.

It should be noted that the name of the issuing bank on the account-depot is depersonalized and monetary certificate amounts are summed up. This allows making accounting on account-depot regardless of the name of the bank – issuer of monetary certificate.

The bank benefits from holding money on its correspondent account, and from conceding ownership rights for this money. Business legal entity benefits from having ownership rights not to the bank liabilities, but to revolving bank assets, which are issues for production purposes in the amount of the end-product cost.. As a result a financial liability is emitted for consumption in the amount of the end-product cost, for which the issuing bank receives payment. Turnover of ownership rights to the money, not the turnover of non-cash money (bank reserves) eliminates the effect of the banking multiplier that results in inflation reduction. The operating system equalizers commodity mass of goods with monetary in consumption and production markets.