Smart Contracts and Central Banking
I want to write a contract that enables me to the be Head of the Banco Nacional de Argentina, the Argentine Central Bank.
The central bank will accept trust in the argentine peso, currency code ARS, from any individual on the network, and it will issue i% new currency every week. the contract specifies to disburse the new funds evenly among all the users who trust the central bank, up to the amount that each individual user trusts.
The second stipulation of the system is that the creator of the contract becomes the central banker and is able to arbitrarily adjust i, the rate of inflation, to any weekly compounded rate above 0.
A command to change i would be represented by an entry in the distributed ledger, which the contract would read every time it runs to determine how much new currency to issue. I imagine an elegant solution would be for the creator of the central bank, the central banker, to have a special rule for trust lines from him to the central bank. For the central banker the amount of the trust line for ARS to the bank would determine the rate of inflation i for the next currency payout cycle.
The central bank distributed contract system is designed to work with Ripple as the provider of trust, the distributed ledger, network consensus and currency exchange. To establish trust for pesos to the Banco sign and submit a Trust transaction to the Riple ledger, specifiying the central bank’s Ripple account address as the issuer of ARS.
Currently in progress is an implementation of contracts in Ripple that allow turing-complete programs to be executed in a sandboxed environment using Google’s Native Client, or NaCl. From the NaCl sandbox your code has access to a limited API to the Ripple network ledger, namely querying and submitting transactions.
To use the central bank program outside of the Ripple network contracts system create a software application with your preferred technology stack and integrate with Ripple using Websockets, HTTP, or one of several Ripple client language libraries. Such a program may even be possible using the native Bitcoin scripting language, or built into the Bitcoin blockchain with Ethereum.
Once the Argentine Central Bank is running it would be awesome to simulate all of the major world money producers and affect an “international” virtualized exchange on Ripple.
