Currency trading suggestion/discussion

This is an attempt to rationalise how currency trading might be represented in the game client and could be brought into gameplay as an activity that characters can participate in (particularly in relation to Caldari megacorporate scrip). I don’t think there is an obvious method so I would be grateful for any thoughts, suggestions and advice on this suggestion.

This is a long post so here is the TLDR - ‘Data Sheets’ items can reasonably be used to represent bearer instruments traded between New Eden’s banks, some of which are likely used to conceal illegal currency trading activity. Players can physically buy and sell these items in the game and will need to undock with shipments in cargo in order to make related RP shenanigans (see “So, what now?” below) work.

What do we know about currencies in New Eden?

Each Caldari Megacorporation issues its own currency (called scrip).

Each Gallente Member State issues its own currency (presumably with a diversity of names).

Lore on currency in the Empire and the Republic is less clear. There is a reference to Uranium Backed Quantums as a local currency in the Republic.

The interstellar economy relies on Interstellar Kredit (ISK), which is regulated by the Secure Commerce Commission.

The degree of relationship between planetary currencies and ISK is unclear but it seems fairly safe to say that it would vary significantly from case to case.

The only currency that we can actually see in the game client is ISK.

What do we know about trading currencies in New Eden?

Allowing free and fair trade with other signatories is one of the three requirements for being a Member State under the Federal Charter. It therefore seems reasonable to assume that currencies of the Federation are open to a free floating exchange market (at least with each other).

In contrast, we know that exchange of Megacorporate scrip is tightly controlled. Only the issuing corporation and Caldari Funds Unlimited are allowed to convert scrip into another currency. The issuing corporation also fixes the rate of exchange between its scrip and other currencies, like ISK. The rate of exchange between two corporate scrips has to be agreed between the two relevant corporations.

There is PF evidence that Amarr Trade Registry records every single financial transaction in the empire so it seems possible that currency trading and the rate of exchange between Imperial currency(ies) is subject to intrusive and centralised regulation of some kind.

I am not aware of any relevant lore on currency trading in the Republic although if local currencies are pegged to the value of a commodity (like uranium), this would imply that they are not free floating.

Wherever currencies are controlled, there will be a black market in competition with the official market. The same is true of New Eden. We know that there are illegal currency exchanges which provide conversion of corporate scrip and that the largest of these are run by the Intaki Syndicate and the Guristas.

So how would an illegal exchange work?

Just like they do here. Currency controls work to support a local currency in two main ways, by fixing official rates of exchange but also by restricting the volume of hard currency acquisitions in any given period (to stop everyone just dumping the controlled currency for a more liquid one).

Black market exchanges therefore work by offering (a) people with reserves of a controlled currency who want to buy hard currency access to an unrestricted volume of hard currency; and (b) people with reserves of hard currency who want to buy controlled currency a rate of exchange that is better for the buyer than the official rate.

NOH, for example, will have: (a) an official rate of exchange between its scrip and ISK of, say, 100:1; and (a) a limit on sales of NOH scrip for ISK of, say, 100 billion units a day (most of which will be allocated to banks and other big institutions to allow them to operate). A hard working NOH middle manager who has been saving for a holiday on that Gallente pleasure hub might well struggle to get access to enough ISK to pay for it. That’s at least part of the point of currency controls - support your local economy, citizen! But they know a guy who knows a guy… it makes the holiday really expensive but they deserve it, right?

Ok, but how does all this relate to stuff that I can shoot in space?

We were just getting there, I think the answer is (or might be)… Data Sheets!

First, look at the item description:

These complicated data sheets may mean little to the layman’s eye, but can prove valuable in the right hands.

Second, and more importantly, look at which NPC corporations buy and sell them on the in game market - it’s all the big financial institutions!

Wait a minute though, New Eden’s banks would be trading currency (and other assets) using digital platforms so what might these physical Data Sheets that they are trading among themselves be? The same is true in our own banking system but it’s also true that there is a subset of the market in ‘bearer instruments’ to provide anonymity to investors. My suggestion is that Data Sheets could be bearer instruments being bought and sold by New Eden’s banks.

A bearer instrument is a document that entitles the holder of the document to ownership of the underlying property. Unlike normal registered instruments, no record is kept of who owns bearer instruments or of transactions involving transfer of ownership, enabling investors to deal with the property anonymously.

Now, much of the trade in Data Sheets / bearer instruments is almost certainly perfectly legal. People just like anonymity (and don’t like paying tax). However, the lack of ability to trace the chain of ownership also makes it a perfect vehicle for hiding illegal transactions as well.

So, what about that NOH middle manager?

Our hard working friend gives their NOH scrip to the guy who knows a guy who changes it into ISK at a rate of 120:1. The middle manager now has ISK so holiday time for them but what about the counterparty to that trade, the person now holding all that NOH scrip?

They can either use it to buy slightly more goods from NOH than they would have been able to afford going through the official exchange or they can flip it back to ISK at the official rate (100:1) and make a 20% margin. Either way, the investor makes profit, NOH loses out and the middle manager has a great time.

So, how do you go about converting illegally acquired NOH scrip back to ISK? You put the scrip in an account with a bank and ask the bank to issue you with a bearer instrument (a Data Sheet) entitling the holder to the contents of the account. You then sell the bearer instrument for an ISK price equal to the amount of scrip in the account divided by the official rate of exchange (more or less) and walk away.

Guess which bank specialises in anonymous accounts and is one of New Eden’s largest sellers of cheap Data Sheets… Intaki Bank! Guess which corporations account for the majority of highly priced buy orders for Data Sheets… Caldari Business Tribunal, Modern Finances and NOH.

So, what now?

If your character wants to support Gurista and Syndicate currency exchanges, have them buy Data Sheets from Intaki Bank in Syndicate and fly them to Lonetrek for sale to the Caldari establishment.

Equally, if they are a good citizen concerned about Gurista manipulations, they could support the liquidity of the scrip markets by trading legitimate Data Sheets between financial institutions while making a modest profit. Nothing wrong with pursuing profit, Citizen!

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So admittedly there’s a lot here for me to wrap my head around, but that’s a good thing I wanna say. You go into detail and as a result, you make a very compelling case here for what I do understand on my first read. Certainly way more thought than i was putting into into it.

If do feel like as if you talked to me in the past about Data sheets being representative of scrip and i was dismissive, and i do apologize for that. As i see now, it’s a lot more spot on than i originally thought.

So have my 1+ and have a snek

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This is a really well written post about something that many of us don’t think much about in our RP. But it’s definitely something I will keep in mind from now on. Thank you for sharing.

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I want to add that capsuleers tend to use citadels nowadays, avoiding taxes to the empires. I wonder if this fact would increase or decrease the potential value of an empire or corporation currency compared to ISK.
It seems like the price of some planetary resources seems to drop in the last couple of years. Will capsuleers dominate all baselines and the empires even more in the future?

ISK seems to loose some value in general due to inflation, but some products like upwell structures are very cheap. Does upwell use it’s own currency? Is that the reason why they can offer space stations for such ridiculous low prices?
And who pays for it in the end? :3

Thanks for your thoughts. It was my intention to focus on how to play in this space using the tools that we have available in the game client and in a way that works with what lore we have available, rather than talk about the value of ISK and other currencies (which has been discussed at length elsewhere and has no definitive answer).

That said:

  • the relative value of currencies are normally influenced by a whole host of factors, one of which is the certainly the tax burden placed on them;
  • I’m not sure that the price of planetary resources has dropped much;
  • I agree it seems like that capsules’ influence on the cluster’s economy will increase rather than decrease;
  • ISK inflation is definitely a thing;
  • inflation is one reason why Upwell structures seem cheap, others are reduced demand and production lines in null optimising the process over time;
  • I would be slightly surprised if Upwell (which seems like a purely commercial joint venture) issues its own currency but it’s an intriguing thought;
  • in the case of the Upwell economy, investors in planetary industry pay for it through their taxes to POCO owners and Empires (although the impact on planetary populations must be good and bad in different places).

There are few ways for a non-standard Lai·Dai citizen to legally punish them and LDPS for what happened on Intaki V. Dumping a heap of their currency reserves into Placid seems like an excellent start. Kudos for this idea; I’ll be drawing up plans forthwith.

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I’ve been trying to work this out in my head before having Auriga get in touch with Insaika-haani IC. Pleased you approve!