Thanks for the great input, especially the chargeback question. It seems like it should be at the top of the list but this is something I honestly didn't think of (although I was aware of general potential for fraud I wasn't dipping too heavily in the specifics).

I don't see how the company would be able to establish credibility without having some sort of chargeback policy, but right now I haven't done enough research to discuss a coherent and effective anti-fraud policy. I think it would definitely be a large upfront cost or burden. A shitty way to handle it off the top of my head would be to just issue more currency to reimburse people, but this makes the system as a whole look less credible and would also gradually weaken the currency. It may just be a way of spreading the cost of a warranty over the population of users just like insurance, but at least doing it according to that method would be terrible PR / image.

For the merchant fee, I think it could actually be less. Paypal/square etc. are just conduits to transmit standard currency from one institution to another. In this case, since the currency is always transmitted via the same institution I believe the compan could charge less. It wouldn't have to make as much from an individual transaction because the company has a monopoly over all future transaction. The exit fee on currency can also be though of as a deferred transaction fee - ie, if a company is breaking the currency out of it's self contained loop, then they suffer a penalty fee.

The fees may add up, but hopefully less so than using something like paypal. That being said it would probably be less than cash.

However, this is still more effective than directly investing in a pro-environment ETF because your committing your disposable income to the ETF & securing commitments from sellers etc. that they will continue committing the money to the ETF. It's utilizing a resource that you could not previously invest because you needed the liquidity/actual purchasing power to buy goods. I think the bigger threat of high fees adding up is that if it trades at a discount then you aren't using your money effectively. But then again if a company does vary its price based on what currency you use & doesn't accept it at face value then they are also expressing that they do not care about your values / participation in the system the currency is trying to fund. -- Compare to Berkshare, a complementary currency in the US -- if a company required Berkshare customers to pay more than they would signal that they don't really care about keeping wealth in the local economy.

Thanks for the resources, the legal issues are the area that I'm spending most of my time on, but nothing is simple in this area as that post says. I looked through the posts but haven't clicked on any of the links within the post you referenced. It'd definitely on my to do list. Now, I never planned on flagrantly ignoring laws, but sometimes because of the adversarial nature in this country you have to actually do something and cause a conflict before you get any interpretation on whether something is legal. Regulatory agencies are supposed to be more proactive with guidance etc. but that's not always the case.

Also, despite my own research I have not taken any bar exams yet and may even delay taking one based on where this idea is come November/December. Thus I will definitely need to talk to some lawyers before advancing the idea. Further, even if I was a licensed attorney already I would still likely seek outside advice.

Oddly, I'm actually working literally next to some financial crimes enforcement attorneys this summer but haven't brought up any issues with them yet. Didn't occur to me until recently to talk to them about this idea. Probably because I'm pretty confident they mostly focus on counterfitting.

By funding do you mean intitial funding or how the company is going to make money / sustain itself?

Originally I thought it would be possible to run the company based off a share of the gains from the investments, like a mutual fund management fee. For various legal reasons this turned out to be fairly complex, but I've gone back to the drawing board and this idea may work.

In reality though the company would be funded primarily by the transaction fees although there is the potential for other sources of income but those are slightly farther down the road before they become viable & need at least some circulation of the currency to work.

For organization of the company I'm trying to figure out how the currency is supposed to function before I figure out how to structure the company to facilitate it. Slightly chicken before the egg dillemma, but I think figuring out what the currency is supposed to accomplish and how it is supposed to function comes first.

I think one of the biggest concerns is that there may have to be a subsidiary in the company to split the finances. Ie. there is one part of the company that handles all the money that can be recalled by the users -- the money that is invested in the ETF etcs. The second part of the company would be the company that actually manages the exchanges & facilitation of everything. This is similar to how Kiva is structured - they have a separate subsidiary that manages all the finances for their operations & keep all the money they manage for the loans compeletely separate, even if the money isn't currently invested in the loan. This dichotomy would likely be necessary for the company/currency to have any credibility.

If it goes the route of being something like just swapping equity in kiva-like microloans, then yeah, I see it as a nonprofit. But realistically, if the company is going to develop products consumers actually want to use as a payment mechanism then the company will likely have to be a for profit company to keep up with other competitors in the bitcoin / traditional payment / traditional money transmitter space.

Unfortunately because of the regulatory issues it would likely need some funding from VCs in order to scale. That in addition to actually setting up the trading account / system etc may need some funding just for other financial actors to take it seriously. That being said a way to scale this idea without a lot of funding may be to just start it as a "amazon coins" type deal for a small group of participating environmentally friendly / socially responsible companies. Meanwhile instead of any of the pariticpating companies holding onto the deposits in the "coins"/gift card the desposits just remain with an environmentally friendly bank. I assume the regulatory path in addition to the expected costs could be estimated by looking at the initial steps Greendot went through when establishing there payment systems, but have a restriction on parcipating merchants. Of course at some point the company would diverge from this path as it starts to switch from a closed circuit glorified credit card into a currency that any merchant can opt to accept.

Also, I think there is room for profits to pitch to VCs. The payment space has tons of competitors and is a huge market. However in the financial world there's a lot of protest / disatisfaction but few real world alternatives (it's just a matter of how/who you pitch it to - ie. an environmentalist, someone who hates fiat currency, someone who hates the idea that their purchasing power is tied to the economy as a whole & wants to opt out & have his money tied to a specific sector that thinks long term... & so on). The potential market for this is anyone that bitches about the economy or politics but still wants to spend money.

As for the demo/prototype I agree. Over the next 6 months with my limited coding skills I could probably built a crappy mock app that really just looks a little like a starbucks payment app, but wouldn't survive a second in the real world. It would absolutely suck in comparison to every other app on the market & wouldn't really sell the idea because the whole idea is how the money is managed on the other side of the app.

There are API's from Ameritrade & other brokers that could facilitate all the trading the company needs to do, but chances are they wouldn't sign off on letting someone work off their system just to build a mvp to pitch to investors. They'd probably want more credibility / financie behind it. Could also just lie about what I want to use the account / API for, but that's just something I'm not willing to do & burns too many important bridges & is just plain stupid. Plus with credibility / trust being such an important element to this it would be an even more moronic way to start.

Thanks again for continuing this discussion.