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I know that Ripple supports currency demurrage, as in the decrease of amount of currency one has over time. However, I am wondering if the opposite is also possible? Can one automatically program inflation into a Ripple currency?

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Not directly. The gateway would have to create a transaction for each user, to award them their interest. It would not be built into the protocols as demurrage is. So it would really be up to each gateway to decide who would get interest and how much (and if this process breaks down, no interest gets paid)

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