Kyôske TOMONARI,  Tomoki YATSUZUKA, Kan Hiroshi SUZUKI* & Ken ITO

Submitted 1 July  2019, Revised version accepted, 13 January 2020

Encrypted assets, based on the Blockchain technology such as Bitcoin, have expanded rapidly. In this paper, we systematically redesign the encrypted asset and propose a theoretical framework using double entry bookkeeping methodology. The Blockchain technology can be viewed as an incomplete application of the ledger system, that is single entry bookkeeping. The ledger is shared by all Bitcoin users in the peer-to-peer network and it enables the system to settle payments. In order to ensure an appropriate accounting practice in the system, the ledger and other accounting information needs to be recorded and organized by using double entry bookkeeping to facilitate a true audit process.
The Blockchain technology was proposed as a peer-to-peer network system without center of trust. However, Bitcoin users have pursued their own profit and changed Bitcoin’s quality, from a currency to a speculative investment. In order to overcome this difficulty, Facebook and its cooperative companies proposed a new reserve currency, “Libra” ; a type of stable coin or sovereign coin, which is convertible to legal currencies. However, Libra’s management entity, the Libra Association, is composed of commercial enterprises and it is impossible to prevent the association from pursuing profit-motivated activities. Therefore, the association would hardly deliver a fair and impartial monetary policy to maintain a stable Libra system.
We propose a peer-to-peer network composed only of central banks, which impartially maintain the stability of the financial system without profit motivations. For such a network, we are developing a new Blockchain system, “NAKASO-IWAI’s Post Blockchain systems”. In this article, we will outline the fundamentals of this system. Further details will be published in future articles.