This online copy is presented for educational purposes only. For all official purposes, the formal publication in PDF format prevails.
100% Whole Reserve™ model. The operating model under which a member financial institution holds a client's value in custody, whole, under the client's title, and lends without creating a deposit against the loan; a mark of Pegisai Global Holdings, Inc. (alkaimi.com, Glossary)
Absolute payment standard. The Bank for International Settlements’ settlement standard: settlement final, irrevocable and unconditional. The Digitized Tangible Asset™ met the standard in the second quarter of 2022, the first privately created instrument to meet the same standard central bank instruments meet. (The Alkaimi Financial Ecosystem in Function, Terms)
Access license (ACI). The license class an AMI holds as a correspondent access institution, working directly through an AMI that holds the AGI (Overview, item 11). ACI operations are pending activation (pegisai.com, Home).
Alkaimi Currency Value Index™ (ACVI™) and Alkaimi Government Solvency Index™ (AGSI™). The two indices that rate the intrinsic value of each nation's scrip currency on one standard, from named public sources, on published dates (pegisai.com, About; The ACVI and the AGSI explained).
Alkaimi Ecosystem™. The collaborative network of regionally chartered financial institutions operating the 100% Whole Reserve model, together with the administrative services contracted from Pegisai Global Holdings, Inc. and its subsidiaries. (alkaimi.com, Glossary)
Alkaimi Ecosystem Member financial institution (member institution, AMI). Every financial institution that holds a license issued by Pegisai Global Holdings, of either class (Overview, item 11): a financial institution chartered, licensed and supervised under its own regulator in its own jurisdiction that has licensed the 100% Whole Reserve model and operates on the Alkaimi Ecosystem’s ledger (alkaimi.com, Glossary).
Alkaimi™ ledger. The one custodial ledger, held and administered under bank supervision, on which recognized value is held and settled between member financial institutions; no currency passes onto it (alkaimi.com, Glossary). The ledger records every recognized value and writes every residual whole at the instant it arises, so squaring is a property it cannot lose rather than a reconciliation performed at intervals (The Alkaimi Financial Ecosystem in Function, Terms).
Alkaimi Platform. The platform on which recognized asset value is held, moved and settled without currency. The platform has five elements: the Alkaimi ledger, the DTA™, the Universal Value Unit™, the ring of member institutions, and the administration that licenses and runs the network (pegisai.com, Platform).
Alkaimi Transmutation Standard (ATS). The reading at which a member institution converts value to currency and currency to value at the member institution's desk, in real time, at a reading rather than a bid. The ATS reads the currency markets in real time (pegisai.com, About).
Alkaimi's value recognition method. The complete chain by which an asset’s value becomes instruments in a holder’s possession. Recognition establishes the whole value. The underwriter then signs a ratio of that value. The Mint then issues a ratio of it, and the balance stands unreleased in the ledger. (The Alkaimi Financial Ecosystem in Function, Terms)
Basel III+. The Basel Committee’s completed post-2008 bank standard, in effect for most member jurisdictions from 1 January 2023 and not implemented by the United States. Under Basel III+ a bank’s modeled risk cannot fall below 72.5 percent of the standardized calculation, operational risk is capitalized on the standardized approach, and the trading book is capitalized under the Fundamental Review of the Trading Book. (The Alkaimi Financial Ecosystem in Function, Terms)
Central bank advance. Currency lent by a central bank to a financial institution against collateral under that central bank's own rules; discretionary to each member financial institution and to its central bank. (alkaimi.com, Glossary)
Claim. What a deposit is: a promise by a financial institution to pay currency on demand; the currency is itself a claim on the nation that issues it. (alkaimi.com, Glossary)
Custody. The holding of a client's value on the Alkaimi Ecosystem's ledger under the client's own title, with no lien, pledge or claim created against it by the member financial institution. (alkaimi.com, Glossary)
Debasement. The loss of a currency’s purchasing power when the supply of the currency expands faster than the economy behind it. Each unit carries a smaller share of the same real output, prices rise, and the rise is reported as inflation. The cause is the unit. (The Alkaimi Financial Ecosystem in Function, Terms)
Desk. The place at a member financial institution where currency meets value: where a client instructs an exchange of settled value for currency, and the only place currency and value meet. (alkaimi.com, Glossary)
Digitized Tangible Asset (DTA). A bearer instrument holding whole recognized value in a fixed quantity of universal value units, insured at issuance, settling with finality on transfer, and transmutable to any scrip currency at a licensee bank’s desk without the value moving. One verified asset is recognized into one stack; the stack’s universal value units are combined into uniquely issued instruments; a DTA is one instrument of that stack, segregated in all aspects from every DTA issued outside its stack. (The Alkaimi Financial Ecosystem in Function, Terms)
Drawing right. The holder's right on the recognized asset behind a DTA: the holder may transmute a DTA at the desk into a recognized asset class and take delivery of the asset (pegisai.com, The Model). The underwriter's recourse is the drawing right on the recognized asset (pegisai.com, The legal position of the DTA). For clarification: the holder’s drawing right is a right to transmute a DTA at a member institution’s desk into a recognized asset class and take delivery of an asset of that class. The holder holds no claim on the asset from which a DTA was created. The drawing right on that asset passes to the underwriter only on an issuer’s default, as the surety’s recourse (Legal Notice, What a DTA holds). The definition has been misread on this point, and the misreading is one reason this publication sets the operation out in full.
DTA holding account. The client's own account on the Alkaimi ledger in which the client's DTAs sit. A settlement moves DTAs, whole or in fractional portions, from one holding account to another, final when the DTAs move (pegisai.com, Platform and Ecosystem).
DTA settlement. Settlement performed in DTAs rather than in a currency. What passes between two holdings is a whole number of instruments, each carrying the identical universal value units parity fixes, so the quantity settled is a quantity of instruments and no currency enters the movement. DTA settlement and transmutation are opposite operations rather than variants of one. DTA settlement occurs inside the ecosystem, between holdings, and no currency enters it. Transmutation occurs at the boundary, where a holding is converted into a fiat currency through a licensed bank at an instant of the holder’s choosing. (The Alkaimi Financial Ecosystem in Function, Terms)
Fractional reserve banking. One of the two historical monetary models. A fractional reserve institution lends against a fraction of the reserves standing behind its liabilities, and the lending creates liquidity. Without diligence, management and discipline the model debases the currency. (The Alkaimi Financial Ecosystem in Function, Terms)
Full reserve banking. The second historical model, written by its advocates as one hundred percent reserve banking. A full reserve institution holds reserves equal to the whole of the claims against it, solvent by construction and historically unable to create liquidity. This document uses the term only in historical and regulatory contexts. (The Alkaimi Financial Ecosystem in Function, Terms)
Gateway license (AGI). The primary license class, which places an AMI on platform (Overview, item 11). AGI operations are active (pegisai.com, Home).
Granular Value™. What an asset’s worth becomes when it is recognized rather than priced. The recognition is taken once, at creation, in a unit that does not move, and from that instant the asset’s worth is a quantity rather than an opinion. Recognized value is held in universal value units and never in a currency. (The Alkaimi Financial Ecosystem in Function, Terms)
Level 1 High-Quality Liquid Assets (HQLA). The strictest liquidity class under Basel III+, the class reserved for central bank reserves, counted without discount. The DTA categorizes as Level 1 with no applied discount. (The Alkaimi Financial Ecosystem in Function, Terms)
Liquidity. The capacity to spend, settle and fund obligations now rather than when an asset can finally be sold. Under Alkaimi’s value recognition method liquidity is created at recognition and issued at the Mint’s discipline ratio, and the liquidity is held value rather than a claim on a bank. (The Alkaimi Financial Ecosystem in Function, Terms)
Mint. The issuing discipline of the ecosystem. It issues a ratio of the recognized value rather than the whole of it, and the withheld balance is released later against a record. The Mint therefore performs a rating function at the moment of issuance rather than an agency performing one afterward. (The Alkaimi Financial Ecosystem in Function, Terms)
Parity. Identical universal value units in every instrument of every stack in the system. Parity is created at recognition, in the assembly of universal value units, and every instrument carries it; it is what allows an instrument issued against one asset to settle against an instrument issued against another, whatever the two assets are. (The Alkaimi Financial Ecosystem in Function, Terms)
Product book. The separate pool of loans a member institution funds with a central bank advance secured by rented DTAs, in which no deposit is created; a planned operation of the member institutions (pegisai.com, The Model and Part 4; alkaimi.com, Future Operations).
Purchasing power. What a holding can buy, as distinct from what it is worth in another currency. A position measured in purchasing power is its nominal amount adjusted by the price level of its own economy across the holding period. (The Alkaimi Financial Ecosystem in Function, Terms)
Recognition. One stage of a named chain, not the chain itself. Recognition establishes the whole value of an asset and assembles it into universal value units. It does not underwrite, does not issue and does not deliver, and those are separate operations performed by separate parties. Where this document uses the word alone it means the stage. (The Alkaimi Financial Ecosystem in Function, Terms)
Rent agreement. The agreement under which the owner of Digitized Tangible Assets rents them to a member financial institution for a term, so that the member may pledge them to its own central bank as collateral for an advance. (alkaimi.com, Glossary)
Ring. The member institutions of the Alkaimi Ecosystem, through which every client takes part: every client of the ecosystem is a client of a member institution (pegisai.com, Ecosystem).
Scrip currency. The note and coin a nation issues: the nation's own promise (pegisai.com, About and Part 1).
Segregation; segmentation. Two operations, kept distinct, and each occurs at more than one level. Segmentation divides a larger whole into parts that can be treated separately. It occurs first at the asset, where a portion is carved out of a greater holding: a series of wells from a field, a block from a deposit, a lot from a warehouse position. It occurs again inside the stack, where the recognized value is divided into individual instruments. It also occurs between similar commodities, where two grades or classes of the same material are treated as separate parts rather than one. Segregation isolates a segmented portion so that it stands alone. Once segregated, that portion is recognized on its own, its value is walled into its own stack, and nothing crosses between that stack and any other. The order matters. Segmentation selects what is to be recognized. Segregation isolates it. Recognition then assembles the recognized value into universal value units and combines them into instruments. One field may therefore give rise to several stacks, each recognized separately, each independent, and each carrying a value arrived at on its own facts. (The Alkaimi Financial Ecosystem in Function, Terms)
Smart contract. A computerized transaction protocol that executes the terms of a contract, as defined by Nick Szabo in 1994. The objectives of the design are to satisfy common contractual conditions, including payment terms, liens, confidentiality and enforcement, to minimize exceptions both malicious and accidental, and to minimize the need for trusted intermediaries. Alkaimi uses the term in that original sense and in no other. Alkaimi does not use blockchain or similar distributed-ledger technologies, because of their inefficiency, their lack of security and their lack of relevant functionality. No Alkaimi monetary mechanism moves outside the Alkaimi Ecosystem. (The Alkaimi Financial Ecosystem in Function, Terms)
Stack. The container of one engagement. One stack holds one verified asset; the asset’s total value is segregated into that stack alone; within the stack the recognized value is assembled into universal value units and combined into individual instruments, a bounded and specific quantity, insured as a unit. Each stack is independent of every other, and nothing crosses between stacks. (The Alkaimi Financial Ecosystem in Function, Terms)
Title package. The DTA's internal title file, carried encoded in each UVU™. The title package tracks and retains, in real time, the ownership, the holder, the asset, the usage and the other information regulators require, and the title package is AI monitored (Section 2, item 2.1).
Transmutation. The conversion of a holding into a fiat currency, performed through a licensed bank at an instant of the holder’s choosing. Transmutation is a currency event; the locked value is not repriced by it. (The Alkaimi Financial Ecosystem in Function, Terms)
Underwriting; surety. Insurance embedded inside the creation event, before any instrument exists, at the highest surety class, covering the named assets of the particular stack. Coverage is a contract on named assets, not a promise over a blend. (The Alkaimi Financial Ecosystem in Function, Terms)
Universal Value Unit (UVU). The universal benchmark of value: a fixed quantity of value grains, the same for every asset, into which recognized value is assembled at recognition. A UVU of one asset equals a UVU of any other, and the UVU does not move while every currency moves around it. It is the unit in which recognized value is held and moved. (The Alkaimi Financial Ecosystem in Function, Terms)
Value grain. The fixed unit of value on which the system is built. The grain’s value is fixed and everything else in the system floats around it, so the only question ever asked of an asset is how many universal value units it holds. The grain does not move, is not priced, and has no currency value at any point in its life. (The Alkaimi Financial Ecosystem in Function, Terms)
Walled garden. The closed environment around the Alkaimi ledger: every client enters through a member institution's walled garden gateway, currency never enters the walled garden, and a DTA never leaves the Alkaimi ledger (pegisai.com, Ecosystem and The Model).
Whole reserve. The name The Alkaimi Financial Ecosystem in Function gives the restored model, taken from what the reserve holds rather than from a coverage ratio: one hundred percent whole value. The reserve behind an Alkaimi licensee is recognized value held whole in its own DTA stack, held in universal value units. (The Alkaimi Financial Ecosystem in Function, Terms)
Whole settlement. A settlement between two-member financial institutions recorded as a ledger entry, final when the value moves, with no correspondent between them and no interval in which one holds the other's promise. (alkaimi.com, Glossary)
Whole value. The entire worth of an asset, established at recognition and assembled into universal value units. A fraction of PV-10 or of a cut net present value is a fraction of a discounted derivative, not a fraction of whole value. (The Alkaimi Financial Ecosystem in Function, Terms)
Whole Value Recognition™. The service the member institutions conduct with Alkaimi's value recognition method (alkaimi.com).
Wholesale settlement. The six-operations member financial institutions conduct at this stage, stated at Current Operations; the ecosystem holds a self-imposed embargo on all other operations. (alkaimi.com, Glossary)
The marks. ALKAIMI, PEGISAI, DIGITIZED TANGIBLE ASSET, DTA, UNIVERSAL VALUE UNIT, UVU, UNIVERSAL VALUE ADJUSTMENT, UVA™ and 100% WHOLE RESERVE are marks of Pegisai Global Holdings or its affiliates, used under license within the Alkaimi Ecosystem. 100% Whole Reserve is the mark under which Alkaimi presents its banking model. All rights in those marks are reserved. Use of any of them outside the ecosystem’s licensed operations is unauthorized. (The Alkaimi Financial Ecosystem in Function, Terms)