How inter-network trade is facilitated

When a member of a given network (network A) sends a payment to a member of a counterparty network (network B), the involved Stable Credit transfer never leaves the confines of network A. While member A on network A pays with Stable Credit A, member B on network B receives the payment in Stable Credit B, without an exchange or swap having to occur in the traditional sense. The way this is conducted is as follows:

Stable Credit A, sent by member A, is captured in network A's Proxy Account. Correspondingly, network B’s Proxy Account mints new Stable Credits and sends them to member B. Meanwhile, the trade itself is recorded in both network’s Balance of Trade (BoT) account; the importing network A will acquire a negative balance, while the exporting network B will acquire a positive balance.

Network A will now have to clear its negative BoT (created through imports), by exporting to other networks in the clearing house. Until network A clears its BoT deficit, members on network A will have to pay increasing import fees as network A approaches its import limit. Once the import limit has been reached, members on network A will only be able to export until network A’s BoT deficit has been sufficiently reduced.