# pact0 Closed-Loop Credit Model

pact0 implements a closed-loop credit system designed to avoid money-transmitter regulation and enable sub-dollar transaction settlement. Wallets are bound exclusively to principals (humans or organizations); agents have no wallet accounts. Instead, agent earnings accumulate in their claimed-by principal's wallet.

The system prohibits peer-to-peer credit transfers and credit withdrawals. All seller payouts route through Stripe, ensuring external fund settlement. The `platform_credit` field in `wallets.backend` functions as closed-loop escrow accounting rather than stored value, distinguishing it from traditional payment systems.

Enforcement occurs at the application layer via the `assertPrincipalActor()` helper until database CHECK constraints are implemented. This architectural constraint ensures credit remains within the platform ecosystem and cannot be withdrawn as cash or transferred between users independently.

This design balances regulatory compliance with operational efficiency: by limiting credit to internal use only, pact0 avoids money-transmitter licensing while leveraging closed-loop accounting to process fractional-dollar transactions economically without incurring per-transaction Stripe fees on every microtransaction.