Sovereign cryptocurrencies are a digital means for turning mutual trust into liquidity. Their purpose is to provide a foundation for a grassroots digital economy. (Informally, a distributed system is grassroots if it can have autonomous, independently-deployed instances -- geographically and over time -- that can interoperate once interconnected.) Their coins are units of debt that can be issued digitally by anyone -- people, communities, corporations, banks, municipalities and governments -- and traded by anyone. With sovereign cryptocurrencies, independent local digital economies can emerge without initial capital or external credit, and gradually merge into a global digital economy. As each sovereign provides for the economic and computational integrity of its own cryptocurrency, the needs of a distributed implementation of sovereign cryptocurrencies are comparatively modest -- grassroots dissemination and simple local computations. Importantly, it does not require expensive all-to-all communication and synchronization protocols such as blockchain consensus, Byzantine Atomic Broadcast, or Reliable Broadcast, nor even all-to-all dissemination. In this paper we introduce the principles that underlie sovereign cryptocurrencies; elaborate economic scenarios derived from these principles; specify the Sovereign Cryptocurrencies protocol formally via multiagent transition systems; provide it with an implementation by a grassroots dissemination protocol; prove the implementation correct, fault-resilient and grassroots; which entails that the Sovereign Cryptocurrencies protocol is grassroots.
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