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 MBDC is a new type of stablecoin, backed by a new type of mortgage.

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"Blockchain Tech gives us a golden opportunity to issue sound money backed by mortgages, while significantly lowering the cost of transacting, financing and managing real property"-Davidson Barlett 

Payment Stablecoins are a practical form of digital currency that is gaining popularity. Yet to date, concerns about price stability and backing have limited consumer acceptance of stablecoins as everyday spendable currency, even when advertised as redeemable for US dollars on demand, and even as stablecoin use is increasing exponentially worldwide for foreign exchange, inflation arbitrage, and business to business transactions.

 

GENIUS ACT compliant Stablecoins peg their price to the US dollar and require 1 to 1 reserves of high quality liquid assets such as U.S. dollars and US treasury bills, but their centralized reserve accounts can compromise decentralization and security, the main value propositions of blockchain. 

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A peg cannot guarantee price stability when a given coin’s cash reserves are depleted or frozen due to a bank run or failure; Likewise, one must make a sharp distinction between pegging and backing; Gold backing, for example is only as good as one’s ability to get their hands on the gold.  

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For a true-money use case then, a better-backed stablecoin is needed.                                           

 Enter LANDOLLAR

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LANDOLLAR is the first Mortgage Bank Digital Currency (MBDC), and is issued on demand at mortgage origination to directly fund senior debt, which cannot exceed 50% loan to value for the mortgaged property. For the borrower, it constitutes a principal-only loan denominated in LANDOLLAR TM and is governed by a smart contract which requires mortgage principal to be repaid in same. 

It is a new tokenized and fungible form of commercial bank money, issued in digital form to represent mortgage principal outstanding, and which comes out of circulation as the debt is paid off.

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When combined with $USD lender funding in the form of junior debt, these duel-currency, concurrent (DCC) mortgages somewhat resemble a “wraparound” mortgage, but are originated by the same lender, and are regulated and underwritten like a conventional mortgage with similar loan-to-value ratios. Naturally, principal and interest on the junior $USD debt are payable in $USD. however as the issuer and guarantor of LANDOLLAR TM the lender also acts as a seamless exchange for the two currencies.

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LANDOLLAR  can be kept as reserves or lent out, sold for US Dollars on exchanges in order to pay off existing debt on the mortgaged property, or any other uses consistant with sound banking practices, or to purchase high quality liquid reserve assets such as short-term treasury bills or reverse repurchase (repo) agreements from the Federal Reserve.

  

Due to the lender’s lower cost of funds from issuing MBDC, rather than borrowing the funds from conventional sources, they can better utilize their existing dollar deposits and lend up to 225% greater loan volumes at similar margins, all whilst passing on up to 40% lower blended mortgage interest rates.​

Assuming proper underwiring, MBDC debt is 200% collateralized at 50% loan to value.

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MBDC mortgages may be pledged directly for federal reserve discount window credit lines to meet reserve requirments and insure short-term liquidity. 
 
Requiring MBDC to pay mortgage principal sustains on-going real-world demand; burning principal as it is repaid regulates supply. Within the 50% LTV limit, additional MBDC may be minted as property values increase, giving the property owner access to increased equity while allowing the currency supply to increase in a gradual and controlled manner.  These self-regulating features help maintain both a floor, and a ceiling for the value of the currency.

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In sum, sound loans make for sound mortgages; sound MBDC mortgages make for sound money. The traits of immutability, public transparency and decentralization are shared by real property and blockchain technology; Mortgage Bank Digital Currency combines them with straight-forward safeguards to regulate currency supply and demand; no algorithms are required.