Each member financial institution of the Alkaimi Ecosystem™ evaluated the 100% Whole Reserve™ model against the fractional reserve model it was operating. The evaluation was made in the terms a chartered financial institution answers to its board, its regulator and its auditor.
- What stands behind the obligations
- What stands behind the financial institution's obligations to its depositors.
- What can be measured
- What the financial institution can measure and verify on its own books.
- What can be withdrawn in a day
- How much of what the financial institution owes its depositors can be withdrawn on any given day.
- What the money lent costs
- What the financial institution pays to obtain the money it lends.
- Whether the charter permits custody
- Whether the financial institution's charter, its regulator and the law permit the financial institution to hold its clients' value in custody, whole, rather than taking that value as a deposit and lending against the institution's clients' holdings.
The evaluation found four things.
The promise behind a deposit
Under the fractional reserve model, what a financial institution owes its depositors is a promise to pay currency on demand, and the currency is itself a liability of the central bank, redeemable in nothing and accepted because the nation compels its acceptance.
What stands behind the financial institution's promise cannot be measured at the moment it matters, the day depositors call: its loans are carried at the amount lent and are priced by no market, and its securities are carried at cost while their market value moves with interest rates.
On 30 June 2026 the securities held by insured financial institutions in the United States were carried 326.7 billion dollars above their market value.
Why the promise has weakened every year
That construction has become less stable with every year, for three reasons that compound. Financial institutions create new money every time they lend, and in the United Kingdom deposits created that way are 97 percent of the money the public holds (Bank of England, 2014).
Governments borrow beyond what their taxes cover, and their central banks buy that debt with money the central banks create; on 1 September 2026 the federal debt of the United States stood at 40,112.5 billion dollars against official reserve assets of 253.7 billion dollars, of which every line but the gold is a claim on another nation.
Each unit of money created by either route is spent from the same shelf as the money already held, so what the money already held will buy falls: over the ten years to July 2026 one dollar lost 27.86 percent of what it buys, one pound 29.60 percent, one euro 24.51 percent and one yen 14.09 percent.
The alternatives offered to the public over the same years, cryptocurrencies, stablecoins and the narrow bank, either leave the promise in place, as a stablecoin does, or remove the financial institution's ability to lend at all, as the narrow bank does; in December 2023 the Federal Reserve Bank of New York refused a narrow bank a central bank account on grounds of financial stability.
Alkaimi Ecosystem member financial institutions became concerned because none of the three causes was within their control, and none of the escapes on offer removed the promise from behind what they owed.
The 100% Whole Reserve model in operation
Under the 100% Whole Reserve model, a client's value held in custody is not owed by the financial institution to anyone. The Alkaimi Ecosystem member financial institution may fund the loans it makes with a term advance from its own central bank, on collateral that central bank accepts, against value its clients have rented to it for a term, and not with deposits created by the loan or gathered to fund it, which a depositor can call on any day.
The Alkaimi Ecosystem member financial institution stays within the charter, the regulations and the law under which it already operates, keeping its regulator and its auditor.
Member financial institutions became concerned whether the model could be operated inside their charters at all, and the evaluation showed that it could: no charter examined prohibits a financial institution from holding its clients' value in custody whole, and the model grants credit, which every charter and every definition of a credit institution requires.
Why a collaborative network
Value held whole on the Alkaimi Ecosystem's ledger can be settled only with another Alkaimi Ecosystem member financial institution that holds value on the same ledger. The model therefore requires a collaborative network of financial institutions, and the Alkaimi Ecosystem member institutions chose to form one.
Alkaimi Ecosystem member financial institutions became concerned because a financial institution acting alone could hold whole value and settle it with no one; the concern was resolved by joining together, under one administrator that sets the operating standards for every member and is the arbiter of fact between them.
The four pages beneath this one carry the reasoning in the order the evaluation ran: what a deposit is and what stands behind it; why the alternatives examined were rejected; how the model is operated inside a member's charter; and how member financial institutions move from claims to whole settlement while the claims system continues around them.
On that finding, each Alkaimi Ecosystem member financial institution licensed the 100% Whole Reserve model from Pegisai Global Holdings, Inc. and joined the ecosystem. Nothing on this page or in the pages beneath it is an offer of any product or service; the pages state why regulated financial institutions made that decision, in the terms on which the decision was made.
Compliance statement
This page is an institutional communication published on behalf of the regulated member financial institutions of the Alkaimi Ecosystem. The page is not a solicitation, an offer or an advertisement of banking, investment or other financial services, and it does not describe any product or service offered to any person.
The member financial institutions and their counsel have reviewed this page and the pages of this section for compliance with the financial promotion, consumer protection and advertising rules that apply in the members' jurisdictions, as the members and counsel understand them. The ecosystem's regulatory position is stated in full in the Legal section of this site.