Here is a very natural idea: an entity creates a new virtual currency with the following properties:
- Only that entity has the capability to issue new quantities of that currency
- That entity makes some type of legally binding promise to always buy and sell units of that currency at prices fixed to some underlying commodity. For example, it will always sell for 1.00 USD / unit and buy for 0.99 EUR/ unit.
- Transactions in the virtual currency are transacted in a Bitcoin-style network that is not centralized and not controlled by the issuer.
This is, of course, a very old and often implemented idea. Paper notes were originally issued and thought of as government backed, tradable IOUs. And gold-backed paper currency is pretty much what I've described here. This is the digital, virtualized variant of a very old idea.
This idea is alluded to here on the Contracts page in the BTC wiki. It's called EURcoins on that page.
Are there any existing or serious proposals for alternative virtual currencies backed by commodities?
Obviously, there are advantages and disadvantages to this setup. I'm not asking for a recital of disadvantages. If you are wondering, I see the main advantage of such a proposal as the ability to "send" the underlying commodity point-to-point with relatively low transaction costs. For example, one could pay the equivalent of USD while bypassing the existing credit card and debit payment systems in the US. Whether this is something people really want to do is another question altogether.