First of all, I am from a IT background and currently writing my thesis on a system in which I am have to create a model of a nation. So to run the economy in this simulation (for now you can understand it as a simulation), I need appropriate economic models and monetary policy. I have done my reading on the basics of monetary policy and how central banks are responsible to control the inflation and deflation of currency. And also, I am aware of the gold reserve which now is more like a fractional reserve system. I do understand that the purpose of my project strongly matters in this case, but for a start, a very basic model would be enough. I already am familiar with crypto currencies like Bitcoin, Ethereum etc. Also, this system is run by computer so it's human error / politics proof, or a bit more like an ideal system. So, it would be great to have your insights/opinions on how should I design the currency and the economic model.
In fractional reserve banking the money supply goes up and down according to the rate of new money being created as new loans are made and the rate at which existing money is destroyed as loan (principal) is repaid. So your model needs to include some estimate of the mutual enthusiasm, between banks and their customers, for making new loans. This in turn will be a function of the interest rate amongst other things (IMHO most importantly, people's perception of the future trajectory of house prices).
BTW, I hope you're not assuming that the money supply is capped according to the money multiplier story. That's all completely wrong as the Bank of England confirm => here.
An alternative is full reserve banking where the money supply does not go up and down with loans/repayments. In this case new money can only be created by the government/central bank. This would be far easier to model. When looking at full reserve banking - don't be misled into believing that banks can not lend in such a system (as some textbooks may imply). Peer to peer lenders (e.g. zopa) are essentially full reserve banks and they exist already.