We introduce a Monte Carlo algorithm for the simulation of charged particles moving in the continuum. Electrostatic interactions are not instantaneous as in conventional approaches, but are mediated by a constrained, diffusing electric field on an interpolating lattice. We discuss the theoretical justifications of the algorithm and show that it efficiently equilibrates model electrolytes and polar fluids. In order to reduce lattice artifacts that arise from the interpolation of charges to the grid we implement a local, dynamic subtraction algorithm. This dynamic scheme is completely general and can also be used with other Coulomb codes, such as multigrid based methods. (C) 2004 American Institute of Physics.