The Alberta Buck

The Alberta Buck

Proposal for Ministry of Finance (v1) (PDF, prior)

Research, Develop and Test Wealth-Backed Liquidity Option for Eliminating up to $23B in Annual Interest Transfers by Albertans to Commercial Banks

Table of Contents

Problem: $23B/yr Extraction

$63 million/day flows from Alberta's productive economy to distant financial institutions.

Families pay ~$8,000/year in public debt costs, and 10-15× income housing multiple: birth rate collapse

Young Canadians Seek Opportunity

Across Canada, young people face:

• Housing: 10-15× income (their parents paid 3-5×)
• Birth rate: 1.41 children/woman (34% below replacement)
• Many abandoning home ownership, family formation, staying in Canada

They're not giving up – they're looking for somewhere that rewards hard work.

Alberta can be that place.

Homeownership Crisis

• Average home price:
• Down payment:
• Average mortgage:
• First year's interest:
• Over the term: in interest
• Families pay their mortgage debt ×

Real Families, Real Burden

The Savings: Debt vs Wealth-Backed Money

Side-by-Side Comparison: financed

( the 1st year) stays with the family

Impossible?!? How Banks Actually Create Money

Banks don't lend depositor money – they create new money backed by YOUR assets:

• You pledge home as collateral
• Bank creates in your account
• You pay interest over years
• If you default, bank seizes your collateral

Banks monetize YOUR wealth and charge YOU interest for the privilege

The "Financial Intermediary" Myth

What you're told:

1. Bank collects investor savings (deposits)
2. Bank pays investors interest (e.g., 2%)
3. Bank lends out that money to borrowers
4. Bank charges borrowers higher interest (e.g., 4%)
5. Bank earns the "spread" (2%)

Sounds reasonable, right?

The Reality: Money Creation

Research by Bank of England 2014, and Werner 2014:

1. You get a mortgage with your home as collateral
2. The bank does NOT lend you existing deposits
3. Your payment stream serves as the bank's Asset
4. Bank creates new money Liability in your account
5. Your collateral backs the money; bank charges you interest for decades
6. If you default, the bank seizes your collateral

Banks monetize YOUR wealth and charge YOU interest for the privilege

Three Ways to Finance a Home: Deep Accounting Analysis

Your mortgage contract IS a real asset – like a bond with a payment stream. Banks can (and do) sell these as CLOs/MBS.

So what's really happening?

Cash Lender (Pension Fund Buys Mortgage)

The fund has $380k cash and wants to earn interest by lending it to you.

T0: Contract signed, funds disbursed

The fund swapped one asset (cash) for another (your loan). Total assets unchanged. They had to HAVE the cash first. The cash LEFT their possession.

T1-T25: You make payments (~$24k/year)

T25: Loan fully repaid

The pension fund earned $220k by lending EXISTING money for 25 years.

Bank "Lends" You $380k (Credit Creation)

The bank has no cash earmarked for your loan. Watch carefully.

T0: Contract signed: what SHOULD happen (Werner's Step 1)

At this point, the bank has your IOU (asset) and owes you $380k (liability). This is IDENTICAL to the pension fund after signing but before paying.

T0: "Disbursement": the magic trick (Werner's Step 2)

No cash moved. The bank simply RENAMED its liability from "Accounts Payable" to "Customer Deposit."

Combined effect at T0:

Balance sheet EXPANDED by $380k on both sides. No existing asset was used.

T0+: You spend your "deposit" (write cheque to home seller at different bank)

Reserves leave when your deposit moves to another bank.

But on average:

Some other borrower at some other bank just spent their loan proceeds here. Net reserve change ≈ $0 – it's a closed loop across the banking system.

Key insight: The pension fund needed cash BEFORE lending. The bank creates the deposit FIRST, then "manages reserves" – which in practice means waiting for other banks' borrowers to deposit here.

T1-T25: You make payments

Same as pension fund – bank collects $600k over 25 years, earns $220k interest.

But Wait – Isn't the Loan a "Real" Asset Being Drawn Down?

Your loan contract IS valuable – PV of $600k payments at 1% discount ≈ $500k. Banks DO sell these. So isn't the bank "spending" this asset to create your deposit?

No. Here's why:

The bank's loan asset is NOT reduced by the deposit liability. They're separate entries. The bank could still sell the loan (CLO) even with your deposit on their books.

The loan doesn't "back" the deposit in accounting terms – both are created simultaneously from your signature. The bank gained an asset WITHOUT giving up an asset.

Alberta Buck (You Monetize Your Own Equity)

You own a home worth $505k. You want $380k liquidity without borrowing.

Before: Your Balance Sheet

T0: Attest home value, issue $380k in Alberta Bucks

Simultaneously: Insurer places LIEN on $380k of your home value.

After: Your Balance Sheet

Your NET WORTH is unchanged ($505k). But the COMPOSITION changed:

• Before: $505k illiquid home equity
• After: $380k liquid BUCKs + $125k unencumbered equity + $380k encumbered equity

T0+: You spend BUCKs (buy car for $50k)

You draw down BUCKs to acquire the Car – an asset swap. Total assets unchanged at $885k.

T1-T50: Demurrage and Jubilee

BUCK holders (whoever holds BUCKs) pay 2%/year demurrage to Jubilee Fund. Fund accumulates and pays down liens over time.

T25: You want to release your home (early redemption)

T50: Automatic Jubilee (if you never redeem)

Lien dissolves. Home fully unencumbered. No payment required.

The Fundamental Difference: What Existed Before?

The bank creates BOTH sides from your signature – nothing existed before.

You create money from EXISTING equity – your wealth backs the money.

But What About Bank Reserves?

"Banks need reserves to settle when deposits leave"

In a closed banking system: If all banks create credit roughly equally, deposits flowing OUT ≈ deposits flowing IN. Net reserve movement ≈ zero.

Banks don't "draw down" reserves in normal operations – it's a closed loop.

Why Stablecoins Break This

When you buy $100k USDT, your bank deposit leaves the banking system entirely.

Stablecoins are a one-way valve: Deposits exit the banking system, never return.

Why GENIUS Act Alarms Banks

The GENIUS Act legitimises entities that:

• Drain deposits from banks (no offsetting inflow)
• Don't hold reserves (unlike banks)
• Earn yield on backing assets (Bonds, gold, BTC)
• Compete for deposits without banking costs

CLARITY Act blocked because stablecoin issuers want to offer yields. If stablecoins pay interest, they become strictly better than bank deposits.

Stablecoins scuttle the closed-loop reserve system that let banks create money without actually needing reserves.

Alberta's Banks: Stark Options

The era of charging premium rates for "lending" that's actually money creation is ending. Stablecoins, DeFi, and tokenised assets are exposing the model.

This is inexorable.

ATB Financial, Bow Valley Credit Union, Servus – Alberta's community banks can:

• Provide attestation and custody services (fee income)
• Administer insurance pools (steady revenue)
• Manage redemption and Jubilee operations
• Become trusted infrastructure, not extractive intermediaries

The choice: Cannibalise yourself, or be cannibalised.

Every industry that survived disruption did it by killing their own cash cow first. Banks that wait for Tether and Circle to finish the job will have nothing left to transition to.

Challenge to Alberta

The federal government won't lead this. Ottawa protects Bay Street.

Alberta can:

• Pioneer sound money backed by real provincial wealth
• Keep $23B/year circulating in Alberta instead of flowing to Toronto
• Demonstrate that money creation doesn't require debt slavery
• Build financial infrastructure that serves citizens, not extracts from them

The question isn't whether this transition happens. It's whether Alberta leads or follows.

The Central Problem

Citizens and Businesses Cannot Do What Banks Do

Banks create new money backed by your assets, charge you interest, and can sieze your assets. You cannot create money backed by your own assets – you must borrow from those who can, on their terms.

Result: Wealth transfer from creators to money issuers

The Solution: Alberta Buck

Create money backed by your assets – not money backed by debt, backed by your assets

Exactly the same asset, insurance and money issued. Just no bank – and no forfeiture risk.

How It Works

1. Attest your wealth – Verify ownership and value of asset(s)
2. Create Alberta Bucks – Issue tokens representing a portion
3. Use the liquidity – Spend Alberta Bucks in the economy
4. Pay insurance, not interest – ~0.2-0.5% annual premiums vs. 5-7% interest
5. Retain ownership – Keep full use and control of your assets
6. Redeem BUCKs issued when selling the asset

Jubilee: No Permanent Liabilities

All claims against assets dissolve in years

The Demurrage Mechanism

A annual demurrage fee on all BUCK balances:

• Holding BUCKs costs /year
  • Incentivises investing, not hoarding
• This fee accrues to a Jubilee Fund
  • Fund returns may reduce demurrage rate
• The fund pays down asset liens over time

Redemption Formula

To release an asset early, you pay:

Where \(V\) = original value pledged, \(Y\) = years since pledge.

Example: A Pledged Home

After years, the lien dissolves automatically

• Family assets recovered after poor decisions

Proven at Scale

By history, academic research, and live systems

Bank of England (2014) and Werner (2014) confirm: banks create money when lending – not intermediation of deposits, but credit creation from borrower assets.

MakerDAO: Real-World Validation

• $5+ billion in real-world asset-backed stablecoins (DAI)
• Accepts tokenized real estate, bonds, and other assets as collateral
• Users retain ownership unless liquidated for value decline
• Proves the core mechanism works at scale

Technology Components (All Production-Ready)

1. Blockchain infrastructure (Ethereum, Polygon, or Alberta-specific)
2. Smart contracts (insurance, minting, redemption)
3. Asset tokenization (NFTs for individual assets)
4. Fungible tokens (ERC-20 for circulation)
5. Oracle networks (Chainlink for prices, verification)
6. Parametric insurance (automated claim issuance)
7. DeFi pools (BUCK/CAD, BUCK/USD liquidity)

Alberta would be implementing, not inventing

Why Hasn't This Been Done?

If savings are this significant, why isn't everyone doing it?

Some people ARE doing it; Most economists and bankers don't realize this is money issuance, yet:

• MakerDAO: $5B+ in asset-backed tokens issued
• Stablecoin market: $180B and growing rapidly

The question isn't "can this work?" – it's "will Alberta lead, or follow?"

Impact: Households

40% reduction in home ownership costs

• 580,000 mortgaged households in Alberta
• Average savings: /year per household
• If 50% adopt: $5.8 BILLION retained annually
• Money stays in Alberta communities instead of flowing to distant institutions

Detailed Comparison

Traditional Mortgage (, years)

• Year 1: interest paid
• Total interest:
• Total cost:

Alberta Buck ( insurance)

• Year 1: insurance paid
• Total insurance:
• Total cost:

Lifetime savings per household:

Impact: Business

Businesses exist primarily to pay interest, not create owner wealth. Alberta Buck frees capital for investment, hiring, and growth.

• 170,000 small businesses; ~120,000 carrying debt
• Total business debt: $40+ billion
• Aggregate annual savings: $8.4 billion/year

Agriculture: Harvest Cycle Options

Current cruel choice:

• Sell at harvest when prices are lowest, or
• Finance storage while borrowing at interest hoping for price improvement

With Alberta Buck:

• Attest stored crop value → Create BUCKs for immediate needs → Redeem when selling at optimal prices
• Breaks debt-driven cycle forcing poor sale prices
• Restores hope to small-scale family farming

Impact: Provincial Government

Eliminating $3.2B/year in debt servicing

Alberta's attestable public wealth: $430+ billion (Heritage Fund, Crown lands, infrastructure, resource royalties)

Example: $10 Billion Infrastructure Program

The Compound Advantage: 30-Year Analysis

With $80B financing over 30 years:

• Traditional bonds: Total cost $138.8B, end with nothing
• Alberta Buck: Total cost $105.5B, invest $1.11B annual savings

The Shocking Difference in Outcome

At 4% return, investment account grows to $211.8B

Heritage Fund could grow by $325 billion over 30 years

Constitutional Foundation

Alberta has unique authority under Sections 92(13) and 92A

Alberta Buck operates as insurance-backed wealth attestation and private contract enforcement – both provincial jurisdiction.

Provincial Jurisdiction

Section 92(13): Property and Civil Rights

• Property law and ownership verification
• Contract law and enforcement
• Insurance regulation and parametric insurance

Section 92A: Natural Resources Authority

• Exclusive jurisdiction over resource development
• Taxation and royalty collection
• Constitutional basis for monetizing resources

Precedent: ATB Financial has operated for 87 years outside federal Bank Act jurisdiction.

Why Provincial Partnership?

"If this is private contracts and insurance, why involve the province?"

Private implementation IS possible – MakerDAO proves it. But some banks will fight back instead of evolving.

When hostile banks realise their $23B/year cash cow is threatened, they will use every legal and regulatory tool to shut it down.

Insurers need to recover assets after claims

Without provincial partnership, asset recovery is legally uncertain – insurers won't participate, or premiums become prohibitive.

We must buttress every contract, insurance, and regulatory interface BEFORE rollout – not after hostile banks mobilise against us.

Why Now?

The technology is proven. The frameworks are emerging.

Window of opportunity: Early movers establish frameworks, attract talent, build network effects.

All technology components are production-ready. Alberta can lead – but the window won't stay open forever.

Alberta's Unique Convergence

No other jurisdiction combines ALL these advantages:

• Constitutional authority (Section 92A) – unique among provinces
• Massive attestable wealth – $2+ trillion, highest per capita in Canada
• Proven financial innovation – ATB Financial, 87 years
• Economic urgency – $23B annual extraction creates pressure
• First-mover opportunity – available NOW

The R&D Program

CAD$3M for 12-Months R&D & Prototype

Phase 1: Feasibility and Prototype:

What does this deliver?

Team Structure

• Legal & Regulatory (3): Constitutional lawyer, securities expert, insurance specialist
• Financial Architecture (2): Monetary systems architect, risk management
• Crypto Engineering (3): Blockchain architect, smart contract developer, security auditor
• Analysis & Leadership (2): Economic modeler, project director

Deliverables at Month 12

1. Legal Compliance Framework – Constitutional opinion, regulatory pathway, federal engagement strategy
2. Working Prototype – Testnet deployment, smart contracts, insurance integration, user interface
3. Quantified Risk/Reward – Household, business, provincial fiscal projections
4. Regulatory Pathway – Step-by-step compliance roadmap
5. Pilot Program Design – Participant criteria, measurement framework, Phase 2 plan

Clear Go/No-Go Decision Point

Or: The Manhattan Project Option

$6M, 20 senior staff, 12 months to full roll-out

If this is a civilisation-changing projet, treat it like one. When the stakes are $23B/year and generational wealth transfer, half-measures waste time. Double the investment. Triple the team. Work non-stop until Alberta has a fully scalable implementation.

Risk & Mitigation

Research will quantify each risk with probability estimates and impact assessments. Government decision based on objective analysis, not speculation.

A Generational Opportunity

Canada's best and brightest are leaving – where to?

Young Canadians aren't lazy. They just want a life that doesn't punish productivity with debt slavery.

The question: Can Alberta become where they go instead of away?

Alberta as the Beacon

If Alberta embraces monetary liberty:

Alberta becomes the destination – not just for Albertans, but for ambitious Canadians from coast to coast, and talent from around the world seeking opportunity.

The Virtuous Cycle

Sound money creates a magnet effect:

1. Lower housing costs → Young families can buy homes
2. Family formation viable → Birth rates recover
3. Talent attracted → Innovation flourishes
4. Wealth circulates locally → $23B/yr grows Alberta
5. Success attracts more success → Alberta becomes Canada's engine

Alberta doesn't just keep its youth. It attracts the best from everywhere.

How Alberta Buck Enables This

Young Albertan earning $60,000/year:

Traditional path: Can afford only ~$240,000 mortgage (4× income). Average home costs +. Housing out of reach.

Alberta Buck path: Family attestation enables $200K BUCKs from parents' equity. Young person buys home with $300K BUCKs issued. Annual cost: $6,760 vs $17,260 traditional.

Housing cost: 11% of income (achievable) vs. 29% (impossible)

Family savings compound: over years → helps next generation.

The Ask

CAD$3 Million for 12-Month R&D

Even at 10% of potential:

2.3B annual savings = 767× ROI

Investment vs. Status Quo

Status Quo:

• $23B annual extraction = $63M/day = $2.6M/hour

Research Investment:

• $3M one-time = 68 minutes of current extraction!
• Could potentially eliminate the entire extraction

Research costs $3M.

Status quo costs $63M every single day.

Three Scenarios

The Bold Ask: A Civilisation-Changing Project

$3M proves it works. $6M makes it real.

Alberta's oil sands technology changed global energy, and agricultural innovation fed the world.

This is the next transformation: sound money that keeps wealth with those who create it.

Next Steps

From Proposal to Program

Immediate (Weeks 1-4)

• Cabinet briefing and Treasury Board approval
• Team recruitment initiation
• Constitutional lawyer engagement

Months 1-3

• Team assembly, research workstreams initiated
• Constitutional analysis underway
• Technical architecture design

Months 4-9

• Smart contract development and testnet deployment
• Economic impact modeling
• Security audit and regulatory compliance documentation

Months 10-12

• All deliverables complete
• External expert review
• Ministry briefings and Cabinet presentation
• Go/No-Go decision

Closing

Alberta's Defining Moment

Each day of delay costs Albertans $63 million.

Will you lead this transformation, or watch others pioneer what Alberta could have owned?

Thank You

For Alberta's Future

Dominion Research & Development Corp.