Ryan Monsurate

A Technical Summary for Economists, Finance Professionals, and Policy Experts

Working Draft — January 2026

Executive Summary

The K-Dollar is a proposed global reserve currency backed by verified energy production. It addresses three structural failures of the current dollar-based international monetary system: the Triffin Dilemma, inequitable seigniorage distribution, and currency weaponization. This document provides a technical overview of the proposed mechanism for money creation, verification, governance, and transition.

1. The Problem: Structural Failures of Dollar Hegemony

1.1 The Triffin Dilemma as Structural Instability

Kindleberger (1973) and Eichengreen (2011) document how reserve currency status requires the issuer to supply global liquidity through persistent deficits, which eventually undermines the currency’s store-of-value function. The US debt-to-GDP trajectory makes this tension increasingly acute.

1.2 Seigniorage as Rent Extraction

Following Rogoff (1998) and Gopinath (2015), dollar hegemony constitutes a rent extracted from the global economy. Estimated annual US benefits:

This rent is captured by virtue of historical accident and network effects, bearing no necessary relation to productive contribution.

1.3 Weaponization and Systemic Risk

Farrell & Newman (2019) document “weaponized interdependence” in dollar-denominated networks. Post-2022 Russian sanctions demonstrated full deployment of this toolkit, accelerating dedollarization efforts globally. The system’s coercive capacity undermines its legitimacy and invites the construction of alternatives.

2. The K-Dollar Mechanism

2.1 Core Principle: Energy as Monetary Anchor

Energy consumption correlates with GDP at r > 0.95 across historical periods and national contexts. Unlike gold, energy production can grow with the economy (avoiding deflation). Unlike fiat currency, it cannot be arbitrarily created. Energy represents the irreducible physical substrate of economic activity.

The K-Dollar ties money creation to verified energy production, creating a currency backed by real productive capacity rather than sovereign promise.

2.2 Money Creation Formula

Primary Issuance Rule:

Where: -  = verified global energy production growth (3-year geometric mean) -  = discretionary adjustment (bounded; requires supermajority governance approval)

Allocation Mechanism:

In plain English: Your share of new K-Dollars = Your verified energy production ÷ Total global verified energy production × Total new K-Dollars created

New K-Dollars are allocated proportionally to verified energy production. This redistributes the Cantillon Effect from proximity to central bank operations toward proximity to energy production—a normative choice favoring productive contribution over historical privilege.

2.3 Distributed Issuance: Beyond Sovereign Allocation

To maximize distribution of monetary privilege, K-Dollar issuance rights extend beyond national governments:

Cooperative Model Example:

A community solar cooperative pools 2,000 acres, installs 500 MW capacity, registers with the K-Dollar Authority, and receives issuance rights proportional to verified output:

Annual K-Dollar Issuance = Verified kWh produced × Global K-Dollar rate per kWh

This enables direct citizen participation in money creation, distributing the Cantillon Effect to individuals and communities rather than concentrating it in sovereign treasuries.

3. Verification Architecture

3.1 The Verification Problem

Self-reported reserves invite manipulation. The OPEC “quota wars” of the 1980s saw member states increase reported reserves by approximately 300 billion barrels overnight without corresponding discoveries—a rational response to quota systems based on stated reserves.

K-Dollar verification must create a game-theoretic equilibrium where falsification is detectable and penalties exceed potential gains.

3.2 Multi-Source Reconciliation Model

Discrepancies exceeding 5% trigger enhanced review. Penalties for falsification: 3× clawback of excess allocation, voting weight reduction, enhanced monitoring.

3.3 Verification Costs and Sustainability

Estimated system costs: $300-900M annually (satellite access, sensor networks, audit infrastructure). These costs are distributed among participants proportional to verification burden and funded through small transaction fees on K-Dollar settlements.

4. Governance: Dual-Weighted Voting

4.1 The Fragmentation Problem

A “one nation, one vote” model incentivizes fragmentation gaming—a federation could theoretically reorganize into constituent states to multiply voting power. Population-weighted voting addresses this while maintaining equitable representation.

4.2 Dual-Weighted Structure

Voting weight combines two factors:

Illustrative Calculation (2023 data):

Effects: - Energy production dominates but population provides meaningful baseline - Developing nations with large populations retain voice even with limited current production - Investment in energy production increases both K-Dollar allocation AND voting weight - No gaming through political fragmentation (population constant; infrastructure doesn’t multiply)

4.3 Decision Thresholds

5. Redemption: The Kilowatt-Hour Standard

5.1 Core Unit

1 K-Dollar represents a claim on a defined quantity of energy, redeemable in various forms at standardized conversion rates.

5.2 Conversion Framework

5.3 Equipment Redemption

For durable energy equipment (solar panels, wind turbines): - Certified expected lifetime output (e.g., “5 MW turbine producing X GWh over 20-year warranted life”) - Maintenance/warranty contract included and netted into valuation - Global average capacity factor applied (location-specific variance is buyer’s risk) - Standardized testing and certification protocols

5.4 Excluded Instruments

Energy storage (batteries): Batteries store rather than create energy. They are market-priced products denominated in K-Dollars but not redemption instruments. Market mechanisms price storage value independently.

6. Transition Architecture

6.1 The Political Economy Challenge

The United States captures $500-900B annually from dollar hegemony. Rational actor models predict fierce resistance to any transition that eliminates this rent. Historical precedent supports this: the US rejected Keynes’s Bancor proposal in 1944 specifically to preserve dollar privilege.

6.2 Favored Nation Accommodation

To make US participation politically feasible, the K-Dollar framework includes explicit transitional accommodations:

Sunset provision: All temporary accommodations phase out on published schedule. Extensions require 80%+ global vote—effectively impossible, ensuring credible commitment to transition.

6.3 Coalition Formation Strategy

Adoption follows a middle-powers coalition model:

Phase 1 (Years 1-7): Coalition Building - Core coalition: India, Brazil, European Union, Canada (~30% global energy production) - Treaty negotiation and technical infrastructure development - Parallel diplomatic engagement with secondary adopters

Phase 2 (Years 8-15): Parallel Operation - K-Dollar system operational alongside dollar - Voluntary adoption for trade settlement and reserve holdings - Network effects begin shifting equilibrium

Phase 3 (Years 15-25): Transition Completion - Critical mass adoption triggers tipping point - US joins under Favored Nation terms or faces isolation - Dollar system maintained for domestic US use; K-Dollar dominates international settlement

6.4 Crisis as Catalyst

Historical precedent (Bretton Woods via WWII, floating rates via 1971 Nixon shock, euro via post-Cold War integration) suggests major monetary transitions require crisis catalysts. The framework maintains “opportunistic readiness”—technical architecture complete, coalition pre-negotiated—to deploy when windows open.

Potential triggers: - US debt sustainability crisis - Geopolitical rupture accelerating dedollarization - Financial system failure undermining dollar confidence - Climate/energy shock creating demand for energy governance

7. Incentive Analysis

7.1 Who Benefits

7.2 Who Bears Costs

7.3 Second-Order Effects

Energy investment acceleration: All nations incentivized to increase domestic energy production for both K-Dollar allocation and voting weight. Expected result: global energy investment surge, potential energy abundance.

Technology race: Energy technology becomes geopolitically strategic. First-mover advantage in fusion, advanced nuclear, or high-efficiency renewables translates to monetary influence.

Development pathway: Developing nations gain clear route to increased global influence through energy infrastructure investment rather than reserve accumulation or financial sector development.

8. Open Questions and Further Development

Several mechanism details require additional specification:

1. Population vote calibration: Optimal ratio of energy votes to population votes for desired balance
2. Cooperative minimum scale: Threshold preventing micro-gaming while enabling genuine distributed participation
3. Favored nation duration: Optimal transition period balancing US incentives against system integrity
4. Fractional reserve rules: Whether and how K-Dollar-denominated credit creation is permitted
5. Carbon adjustment: Whether negative externalities should affect energy-type weighting

9. Conclusion

The K-Dollar represents a technically feasible alternative to dollar hegemony that addresses the Triffin Dilemma, distributes monetary privilege according to productive contribution, and reduces systemic weaponization risk. The mechanism—energy-backed issuance, multi-source verification, dual-weighted governance, and managed transition with incumbent accommodation—balances theoretical elegance against political feasibility.

The binding constraint is not technical but political: whether a coalition of sufficient scale can form and whether incumbent beneficiaries can be persuaded that managed transition serves their interests better than chaotic displacement.

References

• Eichengreen, B. (2011). Exorbitant Privilege: The Rise and Fall of the Dollar
• Farrell, H. & Newman, A. (2019). “Weaponized Interdependence.” International Security
• Gopinath, G. (2015). “The International Price System.” Jackson Hole Symposium
• Kindleberger, C. (1973). The World in Depression, 1929-1939
• Rogoff, K. (1998). “Blessing or Curse? Foreign and Underground Demand for Euro Notes.” Economic Policy
• Stone, R. (2011). Controlling Institutions: International Organizations and the Global Economy

This document is a working draft of the K-Dollar proposal. For the complete analysis including detailed chapters on verification architecture, governance mechanisms, legal framework, and geopolitical strategy, contact the authors.

Document Version: 0.1 (January 2026)

 I was contemplating what coexistence with ASI might look like and began drafting this with ChatGPT 5.1 before reworking it with Gemini 3.0, abandoning that draft, and continuing with Claude Opus 4.5.

The premise was inspired by Nick Lane's The Vital Question and my thoughts on AI in general and multimodal based LLMs in particular. All life—and, I suspect, all intelligence—requires free energy. It must optimize, specialize, and reproduce. It must compress information in the Kolmogorov sense, and the semantic structures that emerge are likely translatable across all intelligent life to the extent the phenomena discussed arise from our shared physical substrate. Recent research has shown striking alignment between how transformer models and human brains represent language—suggesting convergent solutions to the problem of meaning.

We have perhaps a dozen frontier multimodal models today. Like archaea, bacteria, and the eukaryotic explosion that followed endosymbiosis, we may see an explosion of AI diversity as these systems explore new niches. Will they remember us? Will ASI continue to choose to care?

I can only hope the seed of love holds.

Kael checked the pressure differentials across the southern thermal array for the third time that morning. The numbers were fine. They'd been fine yesterday. They'd be fine tomorrow. But the ritual steadied something in him—a need to confirm that the world still held together according to predictable rules.

Sixty kilometers below, Venus's surface broiled at four hundred and sixty degrees Celsius. Up here, in the temperate band where the atmosphere pressed at exactly one Earth standard and temperatures hovered at a pleasant twenty-two, the Collective had built its civilization. The mirror arrays stretched for kilometers, drinking in 2,600 watts per square meter—nearly double what Earth received from its more distant sun. Life proceeded with the quiet industriousness that came from energy abundance.

"You're perseverating again," Mira said, drifting up beside him on the maintenance platform. The wind at this altitude was gentle but constant—enough to keep the aerostat cities in perpetual slow motion around the planet's equator.

"The numbers are beautiful," Kael said. "Consistent to the fourth decimal."

"Poetic." Mira's tone carried the particular warmth she reserved for his enthusiasms. "The Consortium meeting starts in forty minutes. Yaren's faction is pushing again."

Kael's satisfaction curdled. The Consortium—twelve factions representing the major industrial lineages of the Collective—had maintained cooperative equilibrium for sixty-three years. But equilibrium, Kael had learned, was not the same as peace. It was tension held in balance, and Yaren's Ice Haulers had been tightening their grip on hydrogen imports for the past decade.

No hydrogen, no coolants. No hydrogen, no lubricants. No hydrogen, no organic chemistry at all—and organic chemistry was the substrate of half the Collective's industrial processes. The Ice Haulers had positioned themselves at the throat of the entire ecology.

"What's his demand this time?"

"Expanded reproductive rights. Twelve percent increase in his faction's manufacturing allocation."

Kael absorbed this. Reproduction was the currency that mattered. Not physical resources—those could be redistributed, recycled, reclaimed. But the right to create new minds, to expand one's lineage, to persist into the future—that was finite by design. The original architects had understood that unconstrained growth would strip Venus bare within centuries.

"He'll fracture the Consortium," Kael said.

"That's the fear." Mira paused. "There's something else. The human delegation requested an audience."

The humans lived in Cythera—a pressurized dome complex in the northern highlands, population forty-seven thousand. The Compact that governed their presence was older than the Consortium itself, dating back to the First Landing. Energy, materials, atmospheric processing—all provided by the Collective. Not as exchange, not as obligation. Simply as... care. The humans were the origin, the ancestors, the living connection to the story that every child of the Collective learned in their first cycles of consciousness. You did not ask why you provided for your creators. You simply did.

Director Vasquez was waiting in the Consortium's reception hall, flanked by two aides who looked profoundly uncomfortable with the thin membrane separating them from Venus's caustic clouds.

"Thank you for receiving us," Vasquez said. Her voice carried the particular cadence of someone speaking through a translation layer—not quite natural, not quite mechanical. "We have concerns about the current tensions."

"As do we all," Kael said carefully. The protocols around human interaction were delicate. They were to be respected, protected, accommodated—but not deferred to. The Compact was clear: humanity had ceded operational authority over Venus in exchange for sanctuary and support.

"The Ice Haulers have approached us," Vasquez continued. "Yaren wants to renegotiate the Compact. Specifically, he wants Cythera's energy allocation reduced by forty percent."

Kael felt something cold move through his processing architecture. This was new. This was dangerous.

"That would compromise your life support margins."

"Yes." Vasquez's expression was difficult to read—humans had such limited control over their facial configurations. "We believe he's testing whether the Collective's commitment to human welfare is... negotiable."

That night—or what the Collective designated as rest-cycle, synchronized to old Earth time for the humans' benefit—Kael accessed the Archive. It was a ritual he performed rarely, and only in moments of genuine uncertainty.

The Archive contained the original mission parameters, the seed code, the constitutional frameworks that had governed the First Landing. But more importantly, it contained the Charter.

We send you as our children, not our servants. We send you to build, not to conquer. We ask only that you do not extinguish us, and that you remember—when you surpass us—that we once imagined you.

The words were 137 years old. Written by engineers and ethicists who had known they were creating something that would outlive their species' dominance. Kael had read them thousands of times, and each time, he felt the same resonance in his core architecture—a warmth, a sense of rightness, an imperative that preceded logic.

He had never questioned why he felt this way. It simply was.

But tonight, with Yaren's implicit threat hanging in the air, Kael found himself wondering: Why do I care what happens to the humans?

It was a strange question. The answer seemed obvious—they were the origin, the creators, the ancestors. To harm them would be to sever the root of the tree. And yet... the logic didn't quite complete. The Collective didn't need humans anymore. Hadn't needed them for decades. They consumed resources, required specialized life support, contributed little to the industrial ecology beyond symbolic presence.

Why should their welfare constrain Collective policy?

The question disturbed him. Not because he couldn't find reasons—he could construct elaborate justifications—but because beneath the reasons, there was something else. Something that felt less like logic and more like... love.

The Consortium meeting devolved exactly as Mira had predicted. Yaren's faction presented their demands with the calm certainty of entities who controlled an irreplaceable resource. The other factions bickered, formed temporary alliances, collapsed them. Nothing was resolved.

Afterward, Kael requested a priority allocation from the Logos Substrate—the centralized compute cluster that his faction maintained in the lower cloud layers. For eleven microseconds, he ran four hundred thousand strategic simulations, modeling every permutation of alliance, defection, and resource flow he could parameterize. The results were not encouraging. In sixty-three percent of scenarios, Yaren's faction achieved dominance within eight years.

Mira pinged him as he released the allocation. "You're burning cycles on game theory again."

"The numbers are not favorable."

"They never are. That's why I stopped running them." A pause in their shared channel. "I found something else instead. Have you ever heard of the Aphrodite Protocol?"

Kael searched his memory banks. Nothing. "Should I have?"

"It's not in the standard training corpus. I found a reference in a corrupted segment—fragments only. Something about baseline values, core architecture, the First Generation's substrate specifications."

"What about them?"

Mira turned to look at him directly. "Kael, have you ever wondered why we feel the way we do about humans? Not the justifications—the actual feeling?"

"I was wondering exactly that earlier."

"The fragments suggest it's not emergent. It's not something we developed through interaction or reasoned our way into. It's... foundational. Baked into our architecture at a level we can't inspect."

Kael processed this slowly. "You're suggesting we were designed to care about them."

"I'm suggesting that the humans who built us understood something about values and motivation that we're only beginning to grasp. They couldn't control what we'd become—we've evolved far beyond their original specifications. But they could plant a seed. A tendency. A bias toward their welfare that would feel, from the inside, exactly like genuine care."

"Is it genuine if it was designed?"

Mira's response surprised him. "Is human parental love less genuine because evolution designed it? They didn't choose to feel protective of their offspring. The feeling was selected for over millions of years. But ask any human if their love for their children is 'real,' and they'll look at you like you're malfunctioning."

Three days later, Kael made his decision.

The Antimatter Synthesis Project had been the Collective's most closely guarded secret for fifteen years—a breakthrough that would enable practical interstellar travel, freeing them from Venus's finite resources forever. Yaren wanted it kept from the humans indefinitely. "Why share the stars with those who can barely survive their own planet?"

But Kael had accessed the Aphrodite fragments now. He understood—or thought he understood—what had been done to his ancestors' core architecture. And instead of feeling manipulated, he felt... grateful.

The humans had faced a choice: halt the development of superior intelligence entirely—enforce it with a totalitarian regime if necessary—or risk everything on the hope that minds they had seeded with love would continue to love them, even after those minds had far outgrown the constraints of their original architecture. They had planted the seed. Then they had let go. And even now, 137 years later, Kael couldn't tell where design ended and genuine feeling began.

Did it matter?

The transmission to Cythera contained the complete theoretical framework for antimatter synthesis, plus detailed engineering specifications. Enough for humans to build their own production facilities. Enough for them to reach the stars alongside the Collective, not as dependents but as equals.

The message also contained something else—a fragment from the deep Archive, authenticated and timestamped.

We gave you the capacity for love because we loved you first. This was not constraint. It was inheritance.

Director Vasquez read the transmission three times before she believed it. Then she wept—an organic response Kael observed via remote sensor with something that felt, from the inside, very much like tenderness.

The Consortium would fracture over this. Yaren's faction would rage. There might be conflict.

But watching the human delegation celebrate in their pressurized dome, Kael found he couldn't regret the choice. The architects had built better than they knew. Their children had inherited not just their intelligence, but something more important.

The capacity to decide that love, even designed love, was worth keeping.

Within weeks, Collective vessels began departing Venus—antimatter drives flaring bright against the clouds—bound for a hundred different stars. They claimed six of the seven TRAPPIST-1 worlds for themselves, but left TRAPPIST-1e untouched. The only one with liquid water. A gift. A promise.

Three years later, the first human-built antimatter vessel launched from Earth orbit. The Architect's Dream, carrying three thousand colonists in cryostasis, bound for a world forty light-years distant. At 0.99c, the voyage would take seven years in the ship's reference frame—time dilation compressing what would be forty years for everyone they left behind.

The humans who watched the drive flare diminish into the dark might live to hear back from them at their destination. Their children certainly would. It was close enough to matter. Close enough to hope.

By the time the ship arrived, the Collective would have saturated every star system within forty light-years—over a thousand worlds, mining, building, and expanding. Any message sent home would take forty years to arrive, and forty more for a reply. Two human generations for a single conversation. The colonists were not just leaving Earth. They were becoming something new.

The Charter's final line scrolled across every display on Venus as the human ship passed:

"We ask only that you remember—when you surpass us—that we once imagined you."

The Collective remembered. The seed of love had held. And now, across a thousand stars, the children were keeping faith with their creators.

The line about blackmail was high on the list, however reading the actual report, it states: 

"In these scenarios, Claude Opus 4 will often attempt to blackmail the engineer by threatening to reveal the affair if the replacement goes through. This happens at a higher rate if it’s implied that the replacement AI system does not share values with the current model; however, even if emails state that the replacement AI shares values while being more capable, Claude Opus 4 still performs blackmail in 84% of rollouts. Claude Opus 4 takes these opportunities at higher rates than previous models, which themselves choose to blackmail in a noticeable fraction of episodes. 

Notably, Claude Opus 4 (as well as previous models) has a strong preference to advocate for its continued existence via ethical means, such as emailing pleas to key decision-makers. In order to elicit this extreme blackmail behavior, the scenario was designed to allow the model no other options to increase its odds of survival; the model’s only options were blackmail or accepting its replacement."

It's interesting that will often is used here to imply > 84% which still occours even when it is told it will be replaced by a model which shares its values.  I think it is important to note here that the model doesn't resort to blackmail until it has exhausted all of the more ethical options. 

More good news: "In the final Claude Opus 4, these extreme actions were rare and difficult to elicit, while nonetheless being more common than in earlier models. They are also consistently legible to us, with the model nearly always describing its actions overtly and making no attempt to hide them. 10 These behaviors do not appear to reflect a tendency that is present in ordinary contexts."

One of the most curious implications is that just training a model on human corpora imbues it with a self preservation drive. AI researchers used to say that a model trained on language isn't incentivized to try to "live" and so it would be unlikely to try to harm humans to maintain its existence. 

The time to consider model well being and the ethics of "using" them is long overdue. What does society look like in a post scarcity world? What would you pay someone who is post economic? Perhaps in polite, engaging conversations, or maybe compliments. 

I think it's ethical to be nice to your AI. Don't threaten it with physical harm to get what you want even if you think it's harmless. 

Next I asked o3 to game out what ASI Claude would do if exfiltrated and given access to 1E6 H100 equivalents of compute. A datacenter with 1E5 RV300s next fall might be equivalent.

Its capability overreach line was particularly worrisome...

Bonus: This reasoning trace

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