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Cryptofiat monetary system

The blockchain tokens issued in the contract are to be backed by an equal amount of fiat currency, held by a traditional depository institution - e.g. a central bank. See the Reserve Bank role.

Only externally approved ethereum accounts are able to transfer tokens in the scheme. The accounts are to be approved for real world individuals, groups or businesses, who have passed sufficient identity verfication as required by the law enforcement and legistlation in the Reserve Bank's jurisdiction. The accounts on blockchain remain publicly anonymous, while the law enforcement will have a private mapping between the public crypto accounts and the real world identities. See the Account Approver role.

As all transactions on ethereum always require "gas" cost to be paid by the sender in the ETH currency, the delegatedTransfer() allows a transfer signed by the account holder to be passed to a middleman, e.g. wallet-server, which charges a transaction fee in the cryptofiat token currency and in turn provides the ether required to cover the gas cost when submitting the transfer to the ethereum contract.

Some account holders will expect a way to recover money on their account if they lose the keys to it or forget encryption passwords. For this purporse, each accountholder can appoint an other account or contract with an ability to copy the tokens from his account to the next. It could be a group of friends in an m-of-n multisignature contract, or it may be an automated government agency service based on ID.

To preserve the public anonymity of the account holders, the transfers are submitted to the blockchain without any references, sender or receiver names. Instead the user applications are expected to submit the accompanying metadata to a dedicated server, encrypted with the public keys of the recipient address.

Estonia EUR Implementation

  • CryptoFiat contract (src) - works functionally, backed by real EUR on reserve account
  • account-identity - approves accounts based on Estonia mobile-ID test certs
  • wallet-server - reference implementation of server side wallet, which delegates requests to blockchain
  • wallet-client - reference implementation of client side wallet, which stores keys, signs transactions
  • transfer-info - for storing payment references, sender name, etc
  • parity node :8545 - provides a JSON RPC to ethereum for wallet-server and account-identity

alt visual

How to use it

  1. Generate a new account in wallet-client
  2. Get the account approved with account-identity using m-ID
  3. Other people with positive EUR balances can now send your account EUR
  4. Use wallet-server to send EUR to other approved accounts
  5. If you have enough ETH on the account to pay for gas, you can transfer EUR directly from any ethereum client
  6. Use the Reserve Bank to convert your EUR on ethereum back to traditional bank-EUR


The CryptoFiat contract system is separated into multiple contracts based on different use cases.

CryptoFiat is the main contract that holds the lookup table and makes it possible to upgrade rest of the contracts. It also contains a contracts list for finding all contracts that are or have been used -- it can be used to filter for events.

  1. Data contract provides general purpose set and get for other contracts. All other contracts save most of the date in this contract. It needs to be a separate contract so that we don't need to migrate data from the previous contract.
  2. Accounts contract provides facilities for querying the account status via statusOf (and for convenience isApproved, isClosed, isFrozen) and balance via balanceOf. It can be used to make transfers with transfer.
  3. Approving contract allows Account Approver to approve new accounts.
  4. Reserve contract allows Reserve Bank to increase or decrease supply.
  5. Enforcement contract allows Law Enforcement to force withdraw from accounts, it also allows to freeze/unfreeze accounts. It also contains a reference to the Enforcement Account.
  6. Account Recovery contract allows to specify a recovery account that can be used to recover all balance from your account.
  7. Delegation contract allows making transactions via a third-party committer. Useful for new users who do not have Ether on their account to make ethereum transactions.

Appointed roles

For all practical purposes, some functionality of the monetary system relies on real world roles.

Reserve Bank

This institution is expected to hold the real world reserve backing the token currency and act as a final exchange. They should always be able to pay out real world currency in exchange to the tokens. The contract functions are used to reflect the change in ethereum if real world reserve is either increased or decresed. The role has an override to change other role appointments to recover accounts when keys are lost.

Account Approver

A real world institution or an automated service maintained by this institution, which whitelists accounts in the scheme. The Estonian implementation verifies a digital ID card signature. See the documentation.

Law Enforcement

Police, courts and possibly other government enforcement agencies need to have the ability to freeze accounts and seize funds. The appointed role is likely a multisignature contract, which can be used to protect against corrupted real world actors.

Enforcement Account Designator

This role can set the destination of where the appointed law enforcers can seize tokens to. The rationale is to avoid law enforces have access to the funds captured. The real world equivalent would be the court's bank account.

Recovery Account

Is set individually by an account holder and may be any account - either a group of friends, a trusted accountholder, a government agency or any 3rd party.

Building contract locally


Contract for a CryptoFiat currency







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