Richard Werner Exposes Central Banks & the SORA Alternative

Introduction

For decades, economist Richard Werner has sounded the alarm on the hidden architecture of the global financial system. Most famous for coining the term “quantitative easing,” Werner is also the author of Princes of the Yen, a book that argues Japan’s central bank played a deliberate role in orchestrating one of the largest asset bubbles in history.

In this interview published in July 2025, Werner goes even deeper—connecting central banking to everything from global conflict to covert intelligence operations. His central message is this: control over money creation means control over economies, governments, and ultimately, history.

Meanwhile, SORA—a decentralized blockchain network—has quietly been building a system that implements Werner’s economic ideas in code. With its elastic token supply, on-chain governance today (token voting) and a planned Parliament design (sortition), and a focus on funding real-world productivity, SORA offers a living, breathing counter-model to the legacy financial system.

Central Banking’s Hidden Role in Crises

According to Werner, central banks are not the stabilizing institutions they claim to be. In reality, they often amplify financial instability. He explains how central banks like the Federal Reserve expand and contract the supply of money in ways that create artificial booms and devastating busts.

The 1920s stock market bubble and the 1930s Great Depression? Werner argues both were Fed-induced—a contested but influential interpretation. He describes how credit expansion followed by sudden tightening pulled the rug out from under the U.S. economy, triggering widespread unemployment and bankruptcies. Mainstream historians and economists cite multiple contributing factors—tariffs, gold standard constraints, and policy missteps—but Werner’s credit-focused analysis has influenced heterodox economic thinking.

But the key insight isn’t just that crises happen—it’s how they happen. In Werner’s view, the root cause is the fact that banks can create money by issuing loans, often with little regulation and almost no transparency. This makes the financial sector the most powerful force in the economy, capable of driving prices, policy, and even public opinion.

The Structural Problem: Who Controls Credit?

Most people think banks lend out money that’s already been saved. Werner debunks this myth. Banks don’t lend existing money—they create new money the moment they issue a loan. This is the origin of most modern currency.

This insight has huge implications. If credit is allocated toward productive uses—like factories, infrastructure, or education—the economy grows sustainably. But if credit is funneled into speculation, housing bubbles, or government bailouts, the result is instability, inequality, and financial fragility.

In Werner’s words, the real battle isn’t over interest rates or inflation targets—it’s over who gets to allocate credit, and for what purpose.

Central Banks and the Machinery of War

One of the most provocative parts of the interview is Werner’s assertion that central banking and warfare are deeply linked. From the founding of the Bank of England in 1694 to the role of the Federal Reserve in World Wars I and II, history shows that the ability to create money has often been used to fund large-scale conflict.

When governments don’t have the public’s support—or the tax base—to pay for war, they turn to central banks. These banks print money, expand credit, and quietly finance military operations that would otherwise be politically impossible.

Werner also touches on more controversial ground, alleging links between central banking, covert intelligence funding, and narcotics-linked banking operations. These claims are disputed and not universally accepted, but his broader point stands: opaque monetary systems create fertile ground for hidden agendas. Where there’s unaccountable control over money, there’s power with no oversight.

The Case for Decentralization

For Werner, the solution is clear: decentralize the power to create and allocate money. He advocates for systems that empower communities, ensure transparency, and tie new money to productive—not speculative—uses.

This is where blockchain comes in. A decentralized, algorithmic system can prevent the kind of manipulative, behind-the-curtain decisions that dominate central banking. But not all blockchains are equal. A real alternative must go beyond speculation and meme coins. It must offer governance, utility, and macroeconomic logic.

This is exactly what SORA aims to provide.

What Is SORA?

SORA is a blockchain-based economic system designed to function as a supranational monetary order—an alternative to centralized financial systems dominated by state-run central banks. Its current infrastructure (SORA v2) is powered by Substrate. The upcoming SORA v3 is transitioning to Hyperledger Iroha—with the Fujiwara testnet running on Iroha 2, and SORA Nexus targeting Iroha 3 for enhanced modularity, governance, and enterprise-grade stability.

SORA is built on five key pillars:

• XOR, its native token, whose supply is elastic and dynamically adjusted through a Token Bonding Curve that ensures algorithmic price discovery and liquidity.
• Democratic governance via SORA’s planned Parliament system. The long-term design uses random sortition to select decision-makers—giving all participants equal opportunity without wealth-based voting. Today, SORA v2 governance operates through XOR token voting on Substrate.
• Productive finance, where the design goal is to allocate newly minted XOR toward productive projects—such as education, infrastructure, or public goods—via governance.
• Polkaswap, a cross-chain decentralized exchange that enables trading between XOR and other assets, ensuring real utility and velocity within the ecosystem.
• Fast, low-cost transactions with minimal fees, designed for practical use in day-to-day economic activity. SORA Nexus targets approximately one-second finality under typical conditions (per the Nexus whitepaper).

While most blockchain networks focus on DeFi speculation or Layer 2 scaling, SORA is focused on building a functional economy, complete with governance, monetary policy, and public finance mechanisms—all embedded in code.

How SORA Puts Werner’s Theories into Practice

SORA’s economic model is structured around the very ideas Richard Werner has promoted for decades.

1. Elastic Money Supply

SORA doesn’t fix XOR’s supply like Bitcoin. Instead, it uses a Token Bonding Curve, an on-chain algorithm that mints or burns XOR in exchange for reserve assets like DAI, ETH, and other approved reserves. This ensures that supply expands when demand rises and contracts when demand falls—helping stabilize price and liquidity.

2. Productive Use of Capital

Newly created XOR is not issued arbitrarily. Per SORA’s design, it is intended to be approved through governance and directed toward projects that generate real economic value—such as education, infrastructure, and innovation hubs. This mimics Werner’s concept of “productive credit.”

3. Democratic Monetary Governance

SORA’s governance is evolving toward a Parliament system using sortition—a random lottery inspired by Athenian democracy. Once fully implemented, this will prevent plutocratic control and ensure monetary policy is shaped by the community, not financial elites. Currently, SORA v2 uses on-chain token voting.

4. Integration with DeFi

Through platforms like Polkaswap, XOR has immediate liquidity and utility. It can be swapped cross-chain, used in liquidity pools, and integrated with algorithmic stablecoins. This creates velocity of money—an essential part of any functioning economy.

SORA vs Central Banking: A Comparison

Werner’s Involvement in the SORA Ecosystem

Richard Werner is not just an intellectual inspiration for SORA—he has actively participated in its development. He delivered keynotes at both the 2021 and 2022 SORA Economic Forums, where he emphasized the need for decentralized economic models that avoid the pitfalls of central banking.

His work on the Disaggregated Quantity Theory of Credit—which emphasizes that the allocation of money is more important than the amount—directly influenced how SORA handles monetary expansion. In SORA’s design, new issuance is framed as funding productive purposes rather than speculation.

Why SORA’s Approach Matters Now

SORA doesn’t just offer a different way to trade tokens—it offers a different vision for the global economy. At a time when inflation, war, and central bank overreach dominate headlines, systems like SORA present real alternatives.

For policy makers, SORA is a testbed for debt-free public finance.
For crypto builders, it shows that governance and utility matter more than hype.
For economists, it validates the idea that monetary architecture can be redesigned, and that such redesign is urgently needed.

Conclusion

Richard Werner has long argued that central banking is not just flawed—it’s structurally dangerous. By quietly controlling the creation and allocation of money, central banks influence every facet of modern life, from the price of food to the outbreak of war.

SORA offers a working model of what a post-central bank system could look like: algorithmic supply management, democratic governance, transparent funding, and a focus on real-world productivity. It is not a theory. It’s operational.

In Werner’s words, “We need to decentralize power.” SORA is doing just that—one block at a time.

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