Some economists have argued for replacing central banker judgment with a fixed function as a way to bring clarity to policy and make the rules fairer. Something like the Taylor rule perhaps:

https://en.wikipedia.org/wiki/Taylor_rule

It can't. For example if you target a certain level of money velocity people could just spam large fake transactions and cause inflation.

Bitcoin does enable some interesting monetary ideas like demurrage, or constant recycling of the money supply. It also runs "open loop". This is implemented in some super small cryptocoins like Freicoin.

https://en.m.wikipedia.org/wiki/Demurrage_(currency)

Decentralized closed-loop monetary policy is an unsolved problem but almost no one is working on it because there's no reward for solving it. There has been some initial work such as https://blog.ethereum.org/2014/11/11/search-stable-cryptocur...

Maker has been working on this problem for close to two years. https://github.com/makerdao/wiki/wiki