Who “owns” the present value assets?
While the sponsor will show the present value assets on its books, these assets are pledged to back the securities issued to Virtualmoney, Inc. for the private currency. These new securities then become a liability for the sponsor. In addition, VMC as the MR$ issuer has pledged to segregate the securities received from the sponsor, and to hold them exclusively for the purpose of securing the issuance of the private currency. As such, these securities become an asset for VMC and the private currency issued becomes a liability. While the sponsor may hypothecate (or borrow against) the present value assets for the purpose of converting MR$ into USD; the sponsor cannot use the present value assets for any other purpose, nor can VMC use the securities it receives for any other purpose. Finally, the holder of the MR$ does not own the present value assets, since he, or she, owns the private currency itself. In effect, no one owns the present value assets in the sense that they can liquidate t
