USFRANC Capital Hedge Policy

1. Overview

USFRANC’s Capital Hedge Policy establishes a strict framework to protect and anchor the value of USFRANC cryptocurrency (ISF).

2. Core Objectives

  • Capital Preservation: Eliminate exposure to speculative or volatile assets.
  • Sovereign Security: Rely exclusively on government-issued instruments from top-rated countries.
  • High Liquidity: Maintain reserves that are accessible within 7 business days at any time.
  • Cash Equivalents: Operate reserve management under validator community governance.

3. Investment Framework

3.1 Approved Asset Classes and Allocations

Asset ClassDescriptionExample InstrumentsTarget
AAA/AA+ rated Sovereign BondsLong-term bonds (8-15 years) from AAA/AA-rated sovereignsGerman Bunds (10Y), Swiss Confederation Bonds (10Y), US Treasuries (8–10Y)70%
Short-Term Sovereign InstrumentsTreasury Bills and Notes under 12 months maturityUS T-Bills (3M, 6M), FRNs, Gins (8M), French BTFs (8M, Bons du Trésor fixe)20%
Cash EquivalentsMoney Market Funds and Insured Bank DepositsEUR/USD Government Money Market Funds, AAA Institutional Liquidity Pools10%

3.2 Specific Investment Conditions

  • Only sovereign issuers from the Eurozone, US, UK, where the coin is prominently build.
  • All holdings denominated in EUR and USD
  • No corporate bonds, equities, cryptocurrencies, derivatives, or speculative assets.
  • Maximum redemption timeframe: 7 business days.

4. Reserve Management

  • The Validator Community retains authority over Reserve Management Entity.
  • Reserve composition manually revalidated by validators.
  • Emergency liquidity action must be discussed and justified publicly.

5. Risk Management Strategy

  • Minimizing by investing only in the top-rated sovereign bonds.
  • Mitigating Liquidity Risk by holding 50% in short-term and cash instruments.
  • Currency Risk by limiting to EUR and USD instruments.

7. Policy Summary

The USFRANC Capital HFEF is: 100% sovereign-based — no corporate or speculative risk. Fully transparent, with decentralized validator control. Designed not for long-term stability, regulatory alignment, and trustworthiness.