smom-dbis-138/docs/vault/COMPLIANCE_REQUIREMENTS.md

DBIS ChainID 138 Vault System - Compliance Requirements

Mandatory Compliance Standards

This document outlines the mandatory compliance requirements for the DBIS ChainID 138 Vault System.

1. ISO 4217 Currency Code Compliance

Requirements

• ALL currency codes, names, or denominations MUST be validated against ISO 4217 standards
• Currency codes MUST be exactly 3 uppercase letters (A-Z)
• Non-ISO 4217 currencies MUST NOT be treated as legal tender
• Non-ISO currencies MUST be explicitly identified as one of:
  • Non-ISO synthetic unit of account (e.g., GRU)
  • Non-ISO internal accounting instrument
  • Commodity code (XAU, XAG, etc.)

Implementation

The system uses CurrencyValidation library to:

• Validate ISO 4217 format (3 uppercase letters)
• Identify recognized ISO 4217 currencies
• Distinguish between legal tender and synthetic units
• Explicitly flag non-ISO currencies

Valid ISO 4217 Examples

• USD (US Dollar) - Legal tender
• EUR (Euro) - Legal tender
• GBP (British Pound) - Legal tender
• JPY (Japanese Yen) - Legal tender

Non-ISO 4217 Examples

• GRU (Global Reserve Unit) - NON-ISO synthetic unit of account, NOT legal tender
• M00, M0, M1 - GRU monetary layers - NON-ISO synthetic units
• XAU - ISO 4217 commodity code for gold (NOT currency, but recognized code)

2. Global Reserve Unit (GRU) Classification

MANDATORY Classification

GRU is a NON-ISO 4217 synthetic unit of account and SHALL NOT be classified as fiat currency.

GRU Monetary Layers

The system recognizes three GRU layers with MANDATORY relationships:

1 M00 GRU = 5 M0 GRU = 25 M1 GRU

Conversion Ratios (MANDATORY - Must Be Enforced Exactly)

• M00 to M0: 1 M00 = 5 M0
• M00 to M1: 1 M00 = 25 M1
• M0 to M1: 1 M0 = 5 M1

These ratios are enforced in GRUConstants.sol and MUST NOT be modified.

GRU Triangulation Requirement

ALL GRU triangulations MUST be conducted through XAU (gold).

Conversion path:

GRU → XAU → Target Currency

The system does NOT allow direct GRU-to-currency conversions without XAU intermediation.

3. XAU Triangulation Requirements

Mandatory Rule

ALL currency conversions MUST go through XAU (gold) triangulation.

Triangulation Formula

CurrencyA → XAU → CurrencyB

Steps

1. Convert CurrencyA to XAU: xauAmount = currencyAAmount / xauRateA
2. Convert XAU to CurrencyB: currencyBAmount = xauAmount * xauRateB

Implementation

The XAUTriangulation library enforces this requirement:

• All conversions use triangulate() function
• Direct currency-to-currency conversions are NOT permitted
• XAU is the universal unit of account

XAU as Universal Unit of Account

• All valuations in the vault system are normalized to XAU
• Collateral values are calculated in XAU
• Debt values are calculated in XAU
• Health ratios are calculated in XAU terms

4. Monetary Formulas (Mandatory Application)

The following formulas MUST be applied exactly as specified without modification:

Money Supply Formula 1

M = C + D

Where:

• M = Money Supply
• C = Currency
• D = Deposits

Money Supply Formula 2

M = MB × m

Where:

• M = Money Supply
• MB = Monetary Base
• m = Money Multiplier

Money Velocity Formula

V = PQ / M

Where:

• V = Velocity
• P = Price Level
• Q = Quantity of Goods
• M = Money Supply

Money Multiplier Formula 1 (Simple)

m = 1 / r

Where:

• m = Money Multiplier
• r = Reserve Ratio

Money Multiplier Formula 2 (With Currency Ratio)

m = (1 + c) / (r + c)

Where:

• m = Money Multiplier
• r = Reserve Ratio
• c = Currency Ratio

Implementation

These formulas are implemented in MonetaryFormulas.sol and MUST be used without modification.

5. eMoney Classification

eMoney as XAU-Denominated Instrument

eMoney tokens in this system are XAU-denominated by design:

• 1 eMoney = 1 XAU equivalent
• eMoney is NOT legal tender
• eMoney is a regulated digital instrument
• eMoney issuance requires collateral backing in XAU terms

Valuation

All eMoney valuations are normalized to XAU:

• Debt calculations assume 1:1 eMoney to XAU
• This ensures consistent valuation across all operations

6. Compliance Enforcement

Validation Points

1. Currency Registration: All currencies are validated for ISO 4217 compliance
2. GRU Handling: GRU is explicitly flagged as non-ISO synthetic unit
3. XAU Triangulation: All conversions enforced through XAU
4. Formula Application: Monetary formulas applied exactly as specified

Error Handling

The system will:

• Reject non-compliant currency codes
• Flag GRU as non-legal tender
• Require XAU triangulation for all conversions
• Enforce GRU conversion ratios exactly

7. Documentation Requirements

Currency Classification

All currency references in documentation MUST:

• Identify ISO 4217 currencies as legal tender
• Identify GRU as NON-ISO synthetic unit of account
• Identify XAU as commodity code
• Identify eMoney as XAU-denominated instrument

Formula References

All formula applications MUST:

• Reference the exact formula being used
• Show all variables and their meanings
• Apply formulas without modification

8. Testing Requirements

All tests MUST:

• Validate ISO 4217 compliance
• Test GRU conversion ratios
• Verify XAU triangulation
• Validate monetary formula applications

Summary

The DBIS ChainID 138 Vault System enforces strict compliance with:

1. ✅ ISO 4217 currency code standards
2. ✅ GRU as NON-ISO synthetic unit classification
3. ✅ XAU triangulation for all conversions
4. ✅ Exact application of monetary formulas
5. ✅ eMoney as XAU-denominated instrument

Any violation of these requirements MUST be flagged, corrected, or rejected prior to response generation.