An Intergovernmental Cybercurrency: Next Steps

The Coupling of Centralized Regulatory Review and Recent Advances in Administrative Law: The Doorway To A MULTI-NATION Revamped Cryptocurrency

NB “Revamped” means created and overseen by the United States, two other countries and the IMF. Background

Centralized Regulatory Review, the process which requires federal agencies to conduct benefit-cost analyses of proposed regulations and to subject them for review by the Executive Office of the President, has been in existence for nearly a half-century. Centralized Regulatory Review provides the fulcrum for the Executive Office of the President to foster the implementation of new initiatives on a national basis. Recent advances in administrative law describe the evolution of centralized regulatory review in a much broader context and provides a mechanism for the possible implementation of a federal cryptocurrency through the utilization of the Administrative Baseline established by centralized regulatory review.

2. Centralized Regulatory Review, as presented in Presidential Administration, would be augmented by:

(1) an administative baseline which will recognize the upcoming demise of the US dollar as the prevailing worldwide currency, with the attendant winners and losers as was the case when Presidential Roosevelt increased the value of gold from $20 an ounce to $35 per ounce. The aforementioned action resulted in a dollar devaluation of about 58% which increased the value of government assets which allowed the Federal Reserve to print more money. It should be noted that any forthcoming restructuring of the debt will probably be sensitive to Income Inequality considerations.

(2) a replacement, if possible, of the existing dollar based regime with an equitable and reliable cryptocurrency created and managed by the United States, two other countries and the IMF. The ultimate distribution of the aforementioned cryptocrurency among existing creditors and/or income classes would be the subject of a notice and comment process.

(3) a process that insures that all supporting documents comply with the Information Quality Act.

Bottom Line: CRE (Center for Regulatory Effectiveness) is not recommending a unilateral adoption of a cryptocurrency at this time by the United States Government; instead, it is recommending that prior to doing so a well-defined cryptocurrency program, the basis for which is outlined below, be subjected to a public review and a comparison be made with it and the current de facto solution to satisfying in the insatiable appetite for funding federal programs — the ever-increasing reliance on deficit financing.

Editor’s Note: China has promoted yuan-denominated gold trading on the Shanghai Gold Exchange and Shanghai International Gold Exchange, allowing foreign investors to settle trades in yuan backed by physical gold in China.

Step-by-Step Pathway

Step	Action	Responsible Body
1	Develop: –an implementation program –publish on the CRE website –seek public comments (b) Draft enabling legislation	Three national government overseers, IMF, CRE Develop a website dedicated to government-wide adoption of a cryptocurrency Ensure compliance with Information Quality Act Address the totality of budget obligations including both funded and unfuned obligations pursuant to https://www.thecre.com/forum8/?p=11471 OMB/Treasury ( External groups: public interest groups, finance, NGO’s)
2	Hold hearings & authorize pilot	House Financial Services & Senate Banking Committees
3	Designate operator (Fed or Treasury)	OIRA
4	Develop and test blockchain infrastructure	Fed / Treasury / NIST
5	Integrate with banking and payment systems	FDIC, OCC, Fed
6	Issue regulations	Treasury & Fed jointly
7	Launch pilot or limited circulation	Authorized agency/FRB/Treasury/CRE/Harvard Law

Steps 3, 4, 5, 6 and 7 can begin immediately but not be implemented until legislation is enacted.

Step 3: Determining the Operating Agency

Option A — Federal Reserve

Most likely candidate.
Already issues money (Federal Reserve Notes).
Could create a CBDC (digital form of U.S. currency) held in wallets managed by banks or directly by citizens.
Would need amendments to the Federal Reserve Act defining:
- What digital dollars are,
- How they’re distributed,
- How they relate to existing reserves and notes.

Option B — U.S. Treasury

Treasury currently issues coins and savings bonds.
It could manage tokenized Treasury securities or stablecoins backed by U.S. debt.
Would require an amendment to the Coinage Act and new enabling statutes specifying technical and regulatory frameworks.

Option C — New Agency

Congress could create a “Digital Currency Authority” or similar entity to:

Operate blockchain infrastructure,
Oversee issuance,
Coordinate with the Fed and Treasury.

Step 4 Develop and Test Blockchain Structure

Phase 1: Requirements & Architecture Design

Define:

Consensus mechanism: Proof of Work (PoW), Proof of Stake (PoS), Delegated PoS, etc.
Blockchain type: Public, private, consortium.
Smart contracts? If yes, choose a platform (e.g., EVM-compatible or custom VM).
Native tokenomics: Block rewards, supply cap, transaction fees.
Governance: On-chain, off-chain, hybrid.
Scalability: Sharding, rollups, L2, sidechains.
Security model: Threat modeling, attack surfaces.

Phase 2: Core Blockchain Development

Core Components:

Networking Layer: P2P protocols, gossip protocols.
Consensus Layer: Implement or adapt a consensus algorithm.
Data Layer: Block structure, transaction format, Merkle trees.
State Management: Account balances, contract state.
VM or Scripting Engine: If supporting smart contracts (e.g., EVM or WASM).
CLI / RPC: Interfaces to interact with the chain.
Wallet infrastructure: Key generation, signing, encryption.

Tools / Languages:

Rust: Used in Polkadot, Solana — high performance.
Go: Used in Cosmos SDK, Tendermint.
C++: Used in Bitcoin Core, EOS.
Python / JS: For scripting and testing environments.

Phase 3: Testing & Validation

Testing Layers:

Unit Tests: Test block/tx validation, mempool, serialization.
Integration Tests: Full-node sync, consensus agreement.
Testnet Deployment: Simulate real-world conditions.
Fuzz Testing: Detect unexpected behavior.
Security Audits: Both internal and external.

Testing Frameworks:

libFuzzer / AFL: For fuzzing.
Truffle / Hardhat: If EVM-compatible.
Tendermint Testnets: For PoS-based chains.
Ganache: For simulating blockchain environments.
CI/CD: GitHub Actions, Jenkins for test automation.

Phase 4: Testnet Launch

Deploy multiple full nodes across cloud providers.
Set up block explorers (e.g., Blockscout).
Allow community validators (if PoS).
Monitor uptime, block times, transaction throughput.
Provide faucet for test tokens.

Phase 5: Mainnet Launch

Final code freeze & audit.
Launch genesis block.
Distribute genesis funds.
Set up bootstrap nodes.
Harden DDoS protection.
Begin on-chain governance (if applicable).

Phase 6: Security & Maintenance

Bug bounty programs (e.g., Immunefi).
Ongoing auditing (post-launch).
Monitoring tools: Prometheus, Grafana.
Validator slashing & incentives.
Upgrade mechanisms: Hard fork, soft fork, or governance-controlled.

Jim Tozzi

Center for Regulatory Effectiveness

Public Participation