I can't see how it could work. If I knew my LunaCoin balance was going to be reset at midnight and it is 1 minute to midnight, I'd be crazy to accept them. Reason backwards from there and I don't see how you could possibly have a stable economy, at least not in the last few days leading up to the reset. People would try like crazy to get rid of their LunaCoins, and it would get harder and harder to find somebody willing to take them.
TiagoTiago asked if anything like "reset everybody's balance at the beginning of every month" has ever been tried, and it reminds me of historical debt relief, where all debts are forgiven every N years, usually by people of a certain religious background.
If I recall correctly, people were very creative about finding ways to get around it, but I don't have any references handy.