First, Moneda is stable. Because it is backed by an asset account consisting of U.S. Government securities, the price is expected to be at or close to the market price on the exchange. Fittingly, there should be no significant swings in price, making it desirable to all who use it or accept it as payment.
Second, Moneda will be scalable to the extent it can easily enable micropayments. Anyone who wishes to make a payment of even less than a dollar will be able to do so with a fraction of a penny fee to the user and only a few cents transaction charge to the merchant.
Third, the use of Moneda will be extremely economical. Because Moneda is being built on the Stellar network, the fee charged by Stellar to make a transaction is a tiny fraction of a cent. Monetran’s fee for transactions range from only .1% – 1%. For example, an international transfer of $200 would cost a total of approximately four dollars in most cases.This is approximately 70% less than the typical $14 fee charged by most banks and processors. Affordability is one of the great benefits of building on the Stellar network and having access to its many advantages.
Fourth, in addition to great savings enabled by Stellar, transactions on that network are processed at lightning speed. A remittance, for example, could provide a P2P international exchange in a few seconds.
Fifth, Moneda is backed by a portfolio of tangible assets, primarily interest bearing instruments such as U.S. Treasuries, and the like. The objective will be capital preservation with a rate of return that keeps pace with inflation, at the minimum.
Sixth, Moneda will be redeemable. The price for redemption will be a simple formula, the principal in the asset account divided by the number of tokens in circulation. This will accomplish two things: one, it will promote a stable price by giving token holders a choice of either the redemption price or the price quoted on the exchange, and two, it will provide extra liquidity in the event of a thinly traded market. Not since the days of the gold standard – nearly a half century ago – has a currency been backed by, and been redeemable for, a valuable asset.
Seventh, the value of Moneda should function perfectly as a store of value. This is only possible when a currency has a stable value to begin with, and the price of Moneda is actually expected to increase from the investments used to back the currency. Because of its unique paradigm, the currency is expected to normally keep pace with inflation because the investments are largely interest rate sensitive.