diff --git a/packages/protocol/contracts/common/test/MockGoldToken.sol b/packages/protocol/contracts/common/test/MockGoldToken.sol
index 97c4e114461..3bff67c24c0 100644
--- a/packages/protocol/contracts/common/test/MockGoldToken.sol
+++ b/packages/protocol/contracts/common/test/MockGoldToken.sol
@@ -7,6 +7,7 @@ pragma solidity ^0.5.3;
 contract MockGoldToken {
   uint8 public constant decimals = 18;
   uint256 public totalSupply;
+  mapping(address => uint256) balances;
 
   function setTotalSupply(uint256 value) external {
     totalSupply = value;
@@ -19,4 +20,13 @@ contract MockGoldToken {
   function transferFrom(address, address, uint256) external pure returns (bool) {
     return true;
   }
+
+  function setBalanceOf(address a, uint256 value) external {
+    balances[a] = value;
+  }
+
+  function balanceOf(address a) external view returns (uint256) {
+    return balances[a];
+  }
+
 }
diff --git a/packages/protocol/contracts/stability/Reserve.sol b/packages/protocol/contracts/stability/Reserve.sol
index c474321a8c0..1b555055819 100644
--- a/packages/protocol/contracts/stability/Reserve.sol
+++ b/packages/protocol/contracts/stability/Reserve.sol
@@ -37,7 +37,12 @@ contract Reserve is IReserve, Ownable, Initializable, UsingRegistry, ReentrancyG
   bytes32[] public assetAllocationSymbols;
   uint256[] public assetAllocationWeights;
 
+  uint256 public lastSpendingDay;
+  uint256 public spendingLimit;
+  FixidityLib.Fraction private spendingRatio;
+
   event TobinTaxStalenessThresholdSet(uint256 value);
+  event DailySpendingRatioSet(uint256 ratio);
   event TokenAdded(address token);
   event TokenRemoved(address token, uint256 index);
   event SpenderAdded(address spender);
@@ -58,13 +63,15 @@ contract Reserve is IReserve, Ownable, Initializable, UsingRegistry, ReentrancyG
    * @param registryAddress The address of the registry contract.
    * @param _tobinTaxStalenessThreshold The initial number of seconds to cache tobin tax value for.
    */
-  function initialize(address registryAddress, uint256 _tobinTaxStalenessThreshold)
-    external
-    initializer
-  {
+  function initialize(
+    address registryAddress,
+    uint256 _tobinTaxStalenessThreshold,
+    uint256 _spendingRatio
+  ) external initializer {
     _transferOwnership(msg.sender);
     setRegistry(registryAddress);
     setTobinTaxStalenessThreshold(_tobinTaxStalenessThreshold);
+    setDailySpendingRatio(_spendingRatio);
   }
 
   /**
@@ -77,6 +84,24 @@ contract Reserve is IReserve, Ownable, Initializable, UsingRegistry, ReentrancyG
     emit TobinTaxStalenessThresholdSet(value);
   }
 
+  /**
+   * @notice Set the ratio of reserve that is spendable per day.
+   * @param ratio Spending ratio as unwrapped Fraction.
+   */
+  function setDailySpendingRatio(uint256 ratio) public onlyOwner {
+    spendingRatio = FixidityLib.wrap(ratio);
+    require(spendingRatio.lte(FixidityLib.fixed1()), "spending ratio cannot be larger than 1");
+    emit DailySpendingRatioSet(ratio);
+  }
+
+  /**
+   * @notice Get daily spending ratio.
+   * @return Spending ratio as unwrapped Fraction.
+   */
+  function getDailySpendingRatio() public view onlyOwner returns (uint256) {
+    return spendingRatio.unwrap();
+  }
+
   /**
    * @notice Sets target allocations for Celo Gold and a diversified basket of non-Celo assets.
    * @param symbols The symbol of each asset in the Reserve portfolio.
@@ -204,6 +229,14 @@ contract Reserve is IReserve, Ownable, Initializable, UsingRegistry, ReentrancyG
    */
   function transferGold(address to, uint256 value) external returns (bool) {
     require(isSpender[msg.sender], "sender not allowed to transfer Reserve funds");
+    uint256 currentDay = now / 1 days;
+    if (currentDay > lastSpendingDay) {
+      uint256 balance = getReserveGoldBalance();
+      lastSpendingDay = currentDay;
+      spendingLimit = spendingRatio.multiply(FixidityLib.newFixed(balance)).fromFixed();
+    }
+    require(spendingLimit >= value, "Exceeding spending limit");
+    spendingLimit = spendingLimit.sub(value);
     require(getGoldToken().transfer(to, value), "transfer of gold token failed");
     return true;
   }
diff --git a/packages/protocol/contracts/stability/interfaces/IReserve.sol b/packages/protocol/contracts/stability/interfaces/IReserve.sol
index 3b21f70afe3..62c33c7fc68 100644
--- a/packages/protocol/contracts/stability/interfaces/IReserve.sol
+++ b/packages/protocol/contracts/stability/interfaces/IReserve.sol
@@ -1,7 +1,7 @@
 pragma solidity ^0.5.3;
 
 interface IReserve {
-  function initialize(address, uint256) external;
+  function initialize(address, uint256, uint256) external;
   function setTobinTaxStalenessThreshold(uint256) external;
   function addToken(address) external returns (bool);
   function removeToken(address, uint256) external returns (bool);
diff --git a/packages/protocol/migrations/07_reserve.ts b/packages/protocol/migrations/07_reserve.ts
index 47a423cbb5c..a88322f34ce 100644
--- a/packages/protocol/migrations/07_reserve.ts
+++ b/packages/protocol/migrations/07_reserve.ts
@@ -10,12 +10,16 @@ import { config } from '@celo/protocol/migrationsConfig'
 import { RegistryInstance, ReserveInstance } from 'types'
 const truffle = require('@celo/protocol/truffle-config.js')
 
-const initializeArgs = async (): Promise<[string, number]> => {
+const initializeArgs = async (): Promise<[string, number, string]> => {
   const registry: RegistryInstance = await getDeployedProxiedContract<RegistryInstance>(
     'Registry',
     artifacts
   )
-  return [registry.address, config.reserve.tobinTaxStalenessThreshold]
+  return [
+    registry.address,
+    config.reserve.tobinTaxStalenessThreshold,
+    config.reserve.dailySpendingRatio,
+  ]
 }
 
 module.exports = deploymentForCoreContract<ReserveInstance>(
diff --git a/packages/protocol/migrationsConfig.js b/packages/protocol/migrationsConfig.js
index a38d8189ef3..0485462aafe 100644
--- a/packages/protocol/migrationsConfig.js
+++ b/packages/protocol/migrationsConfig.js
@@ -83,6 +83,7 @@ const DefaultConfig = {
   reserve: {
     goldBalance: 100000000,
     tobinTaxStalenessThreshold: 60 * 60, // 1 hour
+    dailySpendingRatio: '1000000000000000000000000', // 100%
   },
   stableToken: {
     decimals: 18,
diff --git a/packages/protocol/test/governance/epochrewards.ts b/packages/protocol/test/governance/epochrewards.ts
index 9241fdfe85d..607310d63c9 100644
--- a/packages/protocol/test/governance/epochrewards.ts
+++ b/packages/protocol/test/governance/epochrewards.ts
@@ -481,7 +481,7 @@ contract('EpochRewards', (accounts: string[]) => {
     beforeEach(async () => {
       reserve = await Reserve.new()
       await registry.setAddressFor(CeloContractName.Reserve, reserve.address)
-      await reserve.initialize(registry.address, 60)
+      await reserve.initialize(registry.address, 60, toFixed(1))
       await mockGoldToken.setTotalSupply(totalSupply)
       await web3.eth.sendTransaction({
         from: accounts[9],
diff --git a/packages/protocol/test/stability/reserve.ts b/packages/protocol/test/stability/reserve.ts
index f512625c38f..0a2a4a5bc78 100644
--- a/packages/protocol/test/stability/reserve.ts
+++ b/packages/protocol/test/stability/reserve.ts
@@ -5,6 +5,7 @@ import {
   assertSameAddress,
   timeTravel,
 } from '@celo/protocol/lib/test-utils'
+import { toFixed } from '@celo/utils/lib/fixidity'
 import BigNumber from 'bignumber.js'
 import BN = require('bn.js')
 import {
@@ -35,6 +36,7 @@ contract('Reserve', (accounts: string[]) => {
   const nonOwner: string = accounts[1]
   const spender: string = accounts[2]
   const aTobinTaxStalenessThreshold: number = 600
+  const aDailySpendingRatio: string = '1000000000000000000000000'
   const sortedOraclesDenominator = new BigNumber('0x10000000000000000')
   beforeEach(async () => {
     reserve = await Reserve.new()
@@ -43,7 +45,7 @@ contract('Reserve', (accounts: string[]) => {
     mockGoldToken = await MockGoldToken.new()
     await registry.setAddressFor(CeloContractName.SortedOracles, mockSortedOracles.address)
     await registry.setAddressFor(CeloContractName.GoldToken, mockGoldToken.address)
-    await reserve.initialize(registry.address, aTobinTaxStalenessThreshold)
+    await reserve.initialize(registry.address, aTobinTaxStalenessThreshold, aDailySpendingRatio)
   })
 
   describe('#initialize()', () => {
@@ -63,7 +65,29 @@ contract('Reserve', (accounts: string[]) => {
     })
 
     it('should not be callable again', async () => {
-      await assertRevert(reserve.initialize(registry.address, aTobinTaxStalenessThreshold))
+      await assertRevert(
+        reserve.initialize(registry.address, aTobinTaxStalenessThreshold, aDailySpendingRatio)
+      )
+    })
+  })
+
+  describe('#setDailySpendingRatio()', async () => {
+    it('should allow owner to set the ratio', async () => {
+      await reserve.setDailySpendingRatio(123)
+      assert.equal(123, (await reserve.getDailySpendingRatio()).toNumber())
+    })
+    it('should emit corresponding event', async () => {
+      const response = await reserve.setDailySpendingRatio(123)
+      const events = response.logs
+      assert.equal(events.length, 1)
+      assert.equal(events[0].event, 'DailySpendingRatioSet')
+      assert.equal(events[0].args.ratio.toNumber(), 123)
+    })
+    it('should not allow other users to set the ratio', async () => {
+      await assertRevert(reserve.setDailySpendingRatio(123, { from: nonOwner }))
+    })
+    it('should not be allowed to set it larger than 100%', async () => {
+      await assertRevert(reserve.setDailySpendingRatio(toFixed(1.3)))
     })
   })
 
@@ -152,13 +176,10 @@ contract('Reserve', (accounts: string[]) => {
   })
 
   describe('#transferGold()', () => {
-    const aValue = 10
+    const aValue = 10000
     beforeEach(async () => {
-      await web3.eth.sendTransaction({
-        from: accounts[0],
-        to: reserve.address,
-        value: aValue,
-      })
+      await mockGoldToken.setBalanceOf(reserve.address, aValue)
+      await web3.eth.sendTransaction({ to: reserve.address, value: aValue, from: accounts[0] })
       await reserve.addSpender(spender)
     })
 
@@ -166,6 +187,24 @@ contract('Reserve', (accounts: string[]) => {
       await reserve.transferGold(nonOwner, aValue, { from: spender })
     })
 
+    it('should not allow a spender to transfer more than daily ratio', async () => {
+      await reserve.setDailySpendingRatio(toFixed(0.2))
+      await assertRevert(reserve.transferGold(nonOwner, aValue / 2, { from: spender }))
+    })
+
+    it('daily spending accumulates', async () => {
+      await reserve.setDailySpendingRatio(toFixed(0.15))
+      await reserve.transferGold(nonOwner, aValue * 0.1, { from: spender })
+      await assertRevert(reserve.transferGold(nonOwner, aValue * 0.1, { from: spender }))
+    })
+
+    it('daily spending limit should be reset after 24 hours', async () => {
+      await reserve.setDailySpendingRatio(toFixed(0.15))
+      await reserve.transferGold(nonOwner, aValue * 0.1, { from: spender })
+      await timeTravel(3600 * 24, web3)
+      await reserve.transferGold(nonOwner, aValue * 0.1, { from: spender })
+    })
+
     it('should not allow a removed spender to call transferGold', async () => {
       await reserve.removeSpender(spender)
       await assertRevert(reserve.transferGold(nonOwner, aValue, { from: spender }))