Two wacky ideas to think about

On New Year's Eve I had a privilege of being invited to a CPF interest party. To entertain my host and fellow guests, I shared two wacky ideas with them. I just wanted to see how receptive folks are to them. 

I was fortunate as there were many younger professionals attending the reception so it's a good way to look observe their reactions as well.

So here it goes :

a) NTUC should mint its own cryptocurrency

I did spend 11 months with the IT Department in NTUC-ARU. Amazingly my host worked with SLF who holds the purse-strings behind NTUC initiatives. 

My first idea is that it is time to launch a cryptocurrency and the best body to do this is NTUC-ARU. The idea is that with the wealthy cornering fiat in Singapore and almost all rental properties, a new form of utility token that can be exchanged when low-income Singaporeans perform services to help each other can create a new hierarchy of wealth ownership in Singapore. Of course the question is whether MAS will provide oversight over this project. The group says that for this to work, this Ucoin will need to replace the Linkpoints system. 

After I got home, I now feel that my idea is actually too unambitious. UCoin should not even be a utility token. 

UCoin should be a stablecoin based on the seigniorage model. There should be a USGD that is pegged to the SGD and a reserve currency UCoin that fluctuates to enable NTUC social enterprises to plug into the infrastructure to create a decentralised Union Cooperative. Union members can yield farm on USGD to get passive income just like a co-op.

The biggest issue is that Unions will become a second central bank in Singapore, but if its a question of regulation the massive resources of NTUC will probably find compliance much easier than, say the gang behind Anchor protocol.  

b) Someone should try to sell Polytechnic insurance

Since we're already into crazy ideas. I thought that Polytechnic insurance should totally be a thing. I was telling everyone about this horrible article about kiasu parents threatening to withdraw support because their son chose the Polytechnic track and it actually force the Polytechnic to offer financial support for this student.

Regardless of how abhorrent this idea is, anxious parents may want to perform risk transfer in the event their kid enters a Polytechnic. 

From a solely mathematic perspective, an actuarial scientist can calculate the difference in human capital accumulation for the Polytechnic versus JC cohort. We do know of two facts about how a polytechnic education would affect the balance of one person's human capital:

• 80% of JC students qualify for local university as opposed to 20% of polytechnic students.
• A Local University graduate earns 50% more than a private university graduate while paying much lower fees.  

The question is: If some insurtech company launches Polytechnic insurance, would kiasu parents buy it?

There are some analogues in the insurance world. Tan Kin Lian is probably more proficient in how insurance products are being built, but I can think of how to model Polytechnic risk. 

One model treats polytechnic education (mathematically - I'm not being unPC here) as a critical illness and pays off a lump sum to parents who need to prepare to send children to Australia after the child enters Poly. Another can model a disability payout and pay a monthly fee to offset school expenses until the child's salary exceeds $3,600 or enters a local university. To prevent adverse selection, the actuarial scientist can use PSLE scores to determine premiums and may even insist on a "bribe" that parents will pay their kids if they qualify for a JC program. The idea is that in each risk pool, parents with kids in JC programs will "compensate" parents with kids in Polytechnic programs. 

( Some blockchain enthusiasts will also note that with government data exposed in oracles, a smart contract can govern the payouts. )

The resistance of this idea is that MOE will get upset at anyone who sells this insurance as there is a strong policy objective to equalise outcomes for Poly and JC education. But this is not a fair objection because if Poly and JC outcomes are indeed equalised and parents have no hang-ups, then the value of polytechnic insurance premiums will be zero anyway. The business will fail. 

As such, this is a powerful signal that can be monitored to view how unequal our society is.

Like every polite crowd, I think one of my ideas has received much more support than the other. 

I leave the reader to guess which one is more popular.