Here's a way to implement virtual hybrid accounts, using reserve credit and conventional deposit account software:

From the Bank's point of view

Each member has a reserve credit
amount equal to the sum of:

• the member's mutual credit balance
• the value of the member's CGB stock
• the member's explicit credit line (we expect most loans to be structured as a credit line, so that the member does not have to borrow anything until the member needs it — that is, until the member actually spends it)

That sum is the amount of
credit that all the members together are formally extending to the
individual member. It agrees exactly with reality. The amount that the member can spend, at a given moment, is the sum of the bank balance and the mutual credit amount (any attempted transaction beyond that limit will be denied).

The Bank allows the Members Association, either continuously or once a day:

• readonly access to all member account balances, reserve credit amounts
• write access to the reserve credit amounts
• (ideally, but not necessarily) readonly access to formal credit lines. If this is not possible, the Members Association will have to keep track of mutual credit balances separately too.
• (ideally, but not necessarily) write access to a standing credit line for each member, based on an electronic "letter of credit" from the other members collectively, equal to the mutual credit amount plus value of the member's CGB stock. This would be the formal justification for the Bank to extend that amount of mutual credit to the member.
• For merchant rebates, zero interest loans for in-system expenditures, and other innovative financial cooperation: readonly access to transactions (so that the Association can see who is buying from whom, for how much)

From the Transfer Company's point of view

The member's CGB stock ownership is stored independently by the Transfer Company. Any Members Association requests to transfer stock from one member to another are granted. Nothing special here.

From the Members Association point of view

The Bank handles both external credit and mutual credit. At least once a day, the Association must adjust the amount of stock owned by each member, so that the member's ratio of stock to total credit (not including formal credit lines) is about 10%. At the same time, the ratio of mutual credit to external credit should be normalized so that every member has the same ratio (this keeps interest rates fair across the membership, since reserve credit does not earn interest in conventional software). The Association will accomplish this for each member as follows:

1. Submit a conventional transaction request to the Bank telling the Bank to transfer a certain amount of money from the member's account to the Association's (or vice versa).
2. Tell the Transfer Company to transfer that much stock from the Association to the member (or vice versa).
3. Increase the member's reserve credit and decrease the Association's by that much (or vice versa). Similarly increase the standing credit line, if possible.

To create mutual credit, either through a loan or a grant, all the Association has to do is increase the recipient's reserve credit.

To handle merchant rebates, the Association submits formal transactions from the merchant to the Community Fund and from the merchant to the customer.