I'm just wondering if there's any way of creating a crypto-currency that is stable by-design.
How would one do so? Can there be something like a "central bank" built in into the currency client?
I know it defeats the purpose of a decentralized currency to have a "central bank". I believe bitcoin can be manipulated by someone with a large enough wallet (very large if you ask me) and it is possible for a single entity to act as a "central bank" of sorts if it has the required funds. Or if the government banned and seized all mining equipment to themselves, which would be very impractical manipulation scenario.
Neither can we think of it as a "currency", since it is currently too volatile to think of it as a viable store of value. However it is great for transactional users, which I think gives it the upper hand over current money transmission methods.
Edit 1: My focus is on an built-in algorithmical solution. I've read about the difficulties of pegging the currency, or what a country would have to reinvent if Bitcoin were the official currency. This is not about having a P2P wallet loadable with fiat (as other questions would imply).
Edit 2: The idea is something more akin "A Third Endgame For Bitcoin or, Creating a Truly Free Coin" by Owen Gunden. He proposes unbounding the coin quantity limit, and giving more coins to miners when the price goes up, increasing the amount and therefore lowering its value.
Can a crypto-currency be designed from the ground-up to be a stable and solid store of value? Zero inflation.