WATERCOIN’S USE IN COMMERCIAL AND CONSUMER TRANSACTIONS
WaterCoin appears capable of widespread utility and adoption for use in cross-border commercial transactions in Water and Water related assets. Prior to the creation of WaterCoin, no currency has been denominated in cubic meters of Water. As a consequence, parties to a forward or future purchase and sale of Water assets outside of the same country (or currency zone) must record their transaction in a national Fiat currency with one or both parties forced to bear or hedge the risk of cross currency volatility as well as fluctuations in the price of Water. A cross-border, future market price, forward purchase transaction settled in WaterCoin is one example where this risk may be avoided. Since the price of one WaterCoin approximates the price of one cubic meter of Water, pricing a future purchase contract in WaterCoin enables the purchaser of Water to purchase WaterCoin on the date on which the contract is made and pay those WaterCoin at a future date in exchange for a fixed quantity of Water. In the absence of WaterCoin, the purchaser would be forced to hedge or bear the risk of changes in both cross-currency rates and the price of Water.
Similarly, to the extent that changes in Water price quoted in a national Fiat currency are expected to track changes in that national Fiat currency relative to other Fiat currencies, pricing transactions in WaterCoin will be an effective means to avoid currency risk in ordinary commercial transactions even for goods and services unrelated to Water. At present, ordinary consumer transactions in digital currencies have had significant appeal but limited adoption. This is due to a variety of factors, the most significant of which is the absence of a practical and ubiquitous solution which enables a consumer to pay for goods and services in digital currency and allow a vendor to receive immediate and guaranteed payment for a fixed amount of local Fiat currency. WaterCoin has developed a partial but workable and highly effective solution to this problem through the use of branded debit cards supported by WaterCoin’s valuable Water reserve assets. Under the WaterCoin debit card program a holder of WaterCoin may reserve a portion of their WaterCoin to support their card issuance and use. From the vantage point of an WaterCoin debit card holder, their holdings of WaterCoin will be reduced as they make purchases. From the vantage point of the vendor, they receive immediate payment in full in local currency without making any modification to their ordinary business practices.