Designing a global digital currency

The notion of a global currency is a debate set aside in the past decade as the abstraction saw little potential for realization in a world with heterogeneous governments unwilling to sacrifice seigniorage for optimal design. The technical capability of creating digital currencies, independent of governments, resurrects the discussion and begs the questions of practical design and implementation. Given that price stability is a key feature of currency design, we consider theoretically the issue of pegging a continuously traded digital currency to a periodic measure of inflation. Empirically we identify factors a cryptocurrency might use to create a portfolio mimicking the ideal design.