A stablecoin backed by fiat currency provides individuals and organizations with a familiar unit, yet decentralized method of exchanging value. The innovation of blockchains is an auditable and cryptographically secured global ledger. Asset backed token issuers and other market participants can take advantage of blockchain technology, along with embedded consensus systems, to transact in familiar, less volatile currencies and assets.
In order to maintain accountability and to ensure stability in exchange price, we propose a method to maintain a one-to-one reserve ratio between a cryptocurrency token, called ePound(eGBP), and its associated real world asset, fiat currency. This method uses the Bitcoin blockchains, Proof of Reserves, and other audit methods to prove that issued tokens are fully backed and reserved at all times.
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