A unified transactional model for integrating centrally issued currencies and mutual credit systems into the same software platform

(i had recently read this pdf
(A unified transactional model for integrating centrally issued currencies
and mutual credit systems into the same software platform)

Authored by: Jorge Zaccaro, Playbanq)

and it showed an interesting merger of normal currency and mutual credit systems where some interactions in the mutual credit system creates, increases and decreases a currency supply,
mostly I didn’t understand this pdf at all and also wondered what the advantages of this system are.
but later I asked chatgpt (which is an ai developed by open ai, in my opinion it is very useful) about the advantages of this system then it said the following:
A unified transaction system that combines state-issued currency with a mutual credit clearing system could potentially offer a number of benefits, such as:

  • Increased efficiency: By allowing for the use of multiple different types of currency, a unified transaction system can facilitate trade and exchange between users using different types of currency. This can make it easier for users to conduct transactions and can also reduce the need for intermediaries, such as banks, to facilitate transactions.
  • Inclusivity: A mutual credit clearing system can allow users who may not have access to state-issued currency, such as those who are unbanked or underbanked, to participate in the financial system. This can help to promote financial inclusion and access to financial services for a wider range of users.
  • Stability: By incorporating a state-issued currency into the system, it may be possible to provide a more stable and widely accepted form of currency for users. This can help to reduce the risk of volatility and facilitate the use of the system for more mainstream financial transactions.
    (The end)

and I also asked (only those who read the pdf would understand this) how the currency supply will be decreased in this system it said the following:
It sounds like you are asking about the relationship between the currency supply and transactions involving accounts with negative lower limits in the context of a unified transaction system that combines state-issued currency with mutual credit clearing.

In general, the currency supply refers to the total amount of currency that is available for use in an economy. The currency supply can be created, increased, or decreased through various means, such as the issuance of new currency by a central bank or the creation of new digital currency through a process called “mining.”

One way in which the currency supply can be increased or decreased is through transactions between accounts with negative lower limits. In a mutual credit system, for example, accounts with negative lower limits represent a type of “credit” that can be used to facilitate transactions between parties. When a transaction is made between two parties with negative lower limits, the currency supply is increased for one party and decreased for the other, effectively “clearing” the credit between them.

It is worth noting that the currency minted through transactions between accounts with negative lower limits is not necessarily limited to use between those parties only. The currency created in this way can be used in transactions with other parties as well, depending on the specific rules and conventions of the system in which it is used.

Overall, the relationship between the currency supply and transactions involving accounts with negative lower limits can be complex and multifaceted and will depend on the specific features and characteristics of the system in which it is used.

(The end)

So, my question will this system help in scaling the mutual credit system.

And another question I have is if a mutual credit system is done right will it help in replacing treasury.

And If this unified system is effective than I would suggest we implement this system immediately or of course use this with some changes as seen fit.

Thank you