FX Tribute

This proposal introduces a FX (Foreign Exchange) Tribute to minimize the funding gap for accomplishing the sustainable development goals (SDGs) of the UN “Agenda 2030”. The finance sector is seen as the primary beneficiary of the growth of the global economy. Thus, it is uniquely placed as a channel to redistribute some of the profits and wealth of globalization towards the funding of the SDGs. A tribute on the foreign exchange market, which in 2019 had a 6.6 trillion USD turnover per day, is seen as the most promising model to achieve this goal. To guarantee that the revenues are spent for the intended goals, the contribution is formed as a levy, called FX Tribute instead of a tax. This means that the proceeds are seen as an exchange for using the global public goods and at the same time are earmarked directly to an international Funding Facility, the FX-Fund. The FX-Fund has three groups of members with equal voting rights: The givers, the governments of the participating countries and relevant civil society networks. The FX Tribute generates substantial and stable flows to the fund, causes the least distortion of the real economy, addresses the legal and technical challenges feasibly, and makes avoidance difficult, risky and unprofitable. At the same time, it empowers growth of the economy.<br><br>The FX Tribute has the following attributes: The base of the tribute is the sum of every single settled currency exchange. The tribute rate is 0,01% on each settled currency exchange. The tribute is centrally collected by the CLS Bank in London, Real Time Gross Settlements (RTGS) or a similar infrastructure (e. g. EU’s “Target”). Debtors of the tribute are the Central Banks of the participating countries. Bearers of the tribute are the customers of the currency transactions. The tribute is executed by an additional line on the settlement paper. The FX Tribute can be adopted and introduced unilaterally by any country or currency zone that wishes to do so. A cooperated implementation by some more of the leading currencies is desirable. The estimated revenues, if implemented for the most actively traded currencies, will be in the range of more than US $ 150 billion per year.