The Ricardian contract

Abstract

Describing digital value for payment systems is not a trivial task. Simplistic methods of using numbers or country codes to describe currencies, and ticker tape symbols to issue bonds, shares, and other financial instruments soon run into shortcomings in their ability to handle dynamic and divergent demands. The seemingly arbitrary variations in the meanings of different instruments are best captured as contracts between issuers and holders. Thus, the digital issuance of instruments can be viewed as the issuance of contracts. This paper proposes that the contract is the issue. A document form is described that encompasses the inherent contractual nature of the financial instrument yet copes with the requirements of being an integral part of a payment system.