Upstart crypto visitor Saga wants to result a new global currency on the blockchain. Just don't call it a stablecoin.

Saga's SGA digital currency relies on an international reserve nugget called Special Cartoon Rights (SDR), which was introduced past the International Budgetary Fund in 1969. This is a conventional basket of major earth currencies — the US dollar, the euro, the British pound sterling, the Japanese yen, and the Chinese renminbi — that key banks around the world apply to hedge against fluctuations in their ain local currency. SGA borrows this model for a fiscal musical instrument and puts it on the blockchain.

These days, i SDR is worth about $ane.forty USD, and SGA volition be worth the same when it launches. But SGA'due south value can go up or down depending on how many other people are using SGA. To buy this cryptocurrency is to crusade Saga's smart contracts to generate it from scratch. To sell information technology back is to fire the coins. So the monetary value of SGA can alter, just the idea is that any change in price happens slowly and sustainably.

So SGA is non a stablecoin with a permanently stock-still price. But y'all could adequately telephone call it a "stable currency."

"It's increasingly articulate that for a global economy, we need a global currency," said Saga founder Ido Sadeh Man. "If we want to accomplish this, we need to answer a few questions. Who controls it, how do you tame volatility, and is information technology legitimate?"

Saga treats its token holders as sovereign. Yes, Human started the business, only Saga uses an Ethereum-based governance model that makes it possible for holders to elect a lath of directors or another budgetary committee that ignores his wishes entirely.

Saga is ultimately an ERC-twenty token system that also adheres to AML and KYC practices. While the idea of regulating some new global currency might seem silly, this compatibility should be quite appealing to policymakers. Man explained that Saga probably won't reach status every bit a means of exchange within a twelvemonth or two of launch — why hold information technology if no one accepts it, and why accept it if no one has it? Instead he suggests SGA will find its first applications within hedging.

When asked about his currency playing a function in a world hypothetically free of geopolitical borders, Human being said, "It's obvious that nation-states can't handle all our identities for all our lives, but I don't believe that my generation will witness that, and probably non my children'due south generation either."

SGA launches on December tenth and will be bachelor for trading on Liquid.