Namely, the advisory council includes JPMorgan Chase International chairman Jacob Frenkel; Nobel Laureate in Economic Sciences Myron Scholes; financial futures pioneer and CME Chairman Emeritus Leo Melamed; and the co-director of the Initiative for Cryptocurrencies and Smart Contracts, Cornell University Prof. Emin Gun Sirer.
Dubbed Saga or SGA, the coin will be backed by a “variable fractional reserve” pegged to the International Monetary Fund’s special drawing rights (SDR) – an international reserve asset created in 1969 to supplement member countries’ official reserves for the purpose of expanding global trade.
Specifically, the platform will use smart contracts to regulate the market, according to the white paper. These contracts will generate SGA tokens as needed to meet demand, and will also “burn,” or destroy tokens when the price slips.
Notably, users would sell tokens back to the network, not to each other.
Some tokens will be kept in reserve for times when liquidity is hard to come by, but most are expected to be converted to fiat currencies, according to the white paper.
“Therefore,” the company explained in the statement, “the reserve acts as a buffer, limiting the impact of market fluctuations.”
It claims that the system “can set the ground for the currency to become a store of value and a medium of exchange.”
“Saga represents a step change in maturity for digital currencies,” Mark Tluszc, CEO at Sage investor Mangrove Capital Partners, said in a statement. “The first that combines material benefits to the existing financial system with the potential and needs of the digital world.”
The foundation will do away with the anonymity some cryptocurrencies offer by subjecting Saga holders to know your customer (KYC) and anti-money-laundering (AML) requirements under Swiss law.
The company has eschewed carrying out an ICO in favor of raising funds from venture capital and hedge fund investors.
In addition to Mangrove Capital Partners, Lightspeed, an American venture capital firm that has previously invested in Snapchat and Ripple among others, is an investor.
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