12.36. DD 36: Currency conversion service¶
12.36.1. Summary¶
This document explains the design of the currency conversion service. Such service enables customers to spend their fiat currency to buy Taler coins in a regional currency, and enables merchants to cash-out from the regional currency to fiat.
12.36.2. Motivation¶
The conversion service (CCS) is fundamental for a regional currency and is missing in the Taler/Libeufin ecosystem.
12.36.3. Definitions¶
Fiat-issuer is the fiat bank account that belongs to the regional currency issuer; typically, such bank account belongs to one association that runs the infrastructure. This bank account is hosted at the “fiat bank”. Regio-issuer is the bank account that belongs to the local currency issuer but hosted at the bank that generates the regional currency. Such bank is also called “circuit bank”. Regio-exchange is the bank account that belongs to the Taler exchange and that is hosted at the circuit bank. Fiat-target is a bank account hosted in the same currency of fiat-issuer and that belongs to a customer who initiated a cash-out operation. Regio-user is a bank account hosted at the circuit bank that is different from regio-issuer. Fiat-customer is a bank account hosted in the same currency of fiat-issuer, typically owned by customers that want to withdraw Taler coins in the regional currency.
12.36.4. Requirements¶
CCS must not impact the Nexus structure.
CCS must trigger Taler withdrawls every time a customer buys the regional currency (‘buy-in’ operation).
CCS must offer cash-out operations.
CCS should react as soon as possible to buy-in and cash-out operations.
CCS must show its state to administrators and offer management tools.
CCS must link every fiat-side of a cash-out to its regional currency counterpart. In particular, because every cash-out starts with a payment P from regio-user to regio-issuer and ends with another payment Q from fiat-issuer to fiat-target, CCS must link P and Q.
12.36.5. Proposed Solution¶
The following design assumes that CCS is coded into libeufin Sandbox.
12.36.5.1. Cash-out operation¶
The libeufin Sandbox component learns instantly about a cash-out operation, because it’s the service offering such feature. Therefore, as soon as a cash-out operation gets TAN-confirmed, Sandbox performs a first wire transfer from regio-user to regio-issuer by specifying the amount without any rates/fees applied. Along the same database transaction, Sandbox stores the instructions of another payment P from fiat-issuer to fiat-target, but this time with the cash-out rates/fees. Notably, P includes the current fiat-target and the rates/fees, since these are configurable.
Asynchronously, a background task picks P and sends it to the fiat bank. Finally, fiat bank conducts P and fiat-target receives the wanted amount. The same background task should also retry previous payments like P that failed to be submitted to fiat bank.
CCS offers management endpoints for prepared fiat-transactions. Through them, adminisrators can see, retry, or cancel every fiat-transaction that was prepared to pay fiat-target.
12.36.5.2. Buy-in operation¶
A buy-in operation starts as soon as the customer sends a fiat payment from fiat-customer to fiat-issuer. Sandbox is responsible to detect such an incoming payment in a timely fashion. The detection happens by long polling on the Nexus JSON API. Nexus is ultimately responsible to query the fiat bank via EBICS every X seconds. X should match the tightest interval allowed by the bank.
When Sandbox detects one incoming payment on fiat-issuer, it applies the current buy-in rates/fees and wires the resuling amount from regio-issuer to regio-exchange. At this point, Nexus detects the incoming payment on regio-exchange and makes the exchange aware via the Taler Wire Gateway API. From now on, the system proceeds like it always did in Taler.
12.36.6. Milestones to a MVP¶
Make rates/fees and TAN channels configurable in Sandbox: 7694.
Long polling in Nexus to serve fiat-transactions via native API: 7693.
Long polling in Sandbox to ask Nexus fiat-transactions via native API.
Serve transactions with date ranges in Sandbox Access API: 7685
Implement JSON-based “bank connection” in Nexus. That’s how Nexus gets regio-transactions to serve in the TWG.
Implement fiat-bank’s EBICS flavor.
Ask transactions with date ranges in such flavor in Nexus: 7686.
Implement fiat-transactions management tools.
Note
The list can be incomplete and not necessarily ordered.