Blog article
See all stories ยป

How Programmable Money Will Revolutionize the Financial World

"Programmable Money" is founded on the principle that its issuer can prescribe its usage, transferees, daily spending limits, and even a termination date. One can put any number of conditions in "Programmable Money."

It is a monetary system in which operations are performed automatically, programmatically, and through smart contracts.

The phrase "programmable money" pertains to the digital currency that may be endowed with utilization conditions by executing smart contracts constructed on the blockchain.

Integrating logic-based conditions into "programmable money" can yield several advantages, such as improved user experiences, enhanced transparency, efficiency, and accessibility of financial services.

It is frequently linked to distributed ledger and blockchain technologies, which facilitate novel and inventive applications in payment transactions.

The key is that "programmable money" can only be utilized in particular ways or exchanged under certain circumstances.

As an illustration, when a customer transfers payment for goods, the merchant does not receive the funds until the physical delivery of the products. 

How this is different from the current system: 

The definition of digital currency in conventional financial technology systems is generally established through database entries. 

To deliver the promised "programmability" at this cost, an additional technology system must be developed independently from the database and then connected to it, either internally for the entity responsible for database maintenance or externally for customers via an application programming interface (API).

Applications can engage with database records via an API of a conventional database, which exposes stored program logic. 

Contemporary cryptocurrency systems also employ databases, frequently in blockchain data structures.

However, a significant distinction exists between the two: the records contained within these blockchains are either integrated directly with a programmable script or function in tandem with a general programming functionality that permits direct manipulation of those records.

We can say that with "Programmable Money," the logic is embedded into the value. In the current system, the value ( amount ) is stored separately. And that is fetched using a function call or API. 

In "Programmable Money," as the logic is embedded into the value, there can't be any duplicate spend, or value is spent only after the criteria embedded into the value are met. 

A blockchain database can store both value records and program logic. Communication between these two components is enabled through an intrinsic mechanism.

For example, the concept of "bitcoins" relies on a corresponding script defining the terms of their transactions.

In "Programmable Money," this embedded mechanism ensures that the two constituents are inseparable concerning the entirety of the product.

The feature is of the utmost importance.

As explained, current applications support this, but with two different entities and programs. 

By its guaranteed inextricability, this product affords its users stability that alternative systems that depend on services susceptible to provider changes might not provide.

"Programmable money" exhibits dynamism, adaptability, and the capacity to carry out pre-established directives, unlike fiat currencies.

Recent financial innovation gives rise to the paradigm-shifting notion of programmable money. This analysis will explore the development, intricacies, and ramifications of the components that enable "Programmable money."

Advantages of programmable money 

 1. Improvements to Transparency and Auditability

"Programmable money" can foster confidence among all parties involved by furnishing regulators with a transparent ledger of financial transactions and direct access to transaction history.

"Programmable money" augments anti-money laundering endeavors and erects obstacles for other malevolent undertakings through their monitoring functionalities.

For example, by implementing rigorous controls over employee benefits administration, organizations could eliminate the necessity for such supervision.

2. Efficiency

"Programmable money" enables the synchronization of contractual obligations with physical payment, thereby streamlining transaction processes across multiple tiers.

Substantial enhancements in payment resolution and business operations ensue, therefore.

Furthermore, these advancements have a significant influence on the efficacy of the financial system. By eliminating intermediaries and automating transactions, procedures can be streamlined, administrative work can be reduced, and human error can be mitigated. All these elements contribute in unison to the effectiveness of the financial system.

"Programmable money" improves operational efficiency by using smart contracts to delegate tasks. This is accomplished by eliminating intermediaries, which reduces the likelihood of errors and shortens transaction processing times.

3. Advancements and Innovations in Business Models

Organizations may establish programmable money platforms to foster financial innovation as the bedrock for innovative business models.

Implementing smart contracts for automated and conditional payments in programmable money facilitates the creation of innovative financial instruments and decentralized applications contingent on predetermined conditions and self-executing agreements.

This circumstance provides a prospect for the advent of a wholly novel and undefined business realm.

4. In most cases, technology has helped us in reducing the cost. The 'What' part has remained the same, but the 'How' is different. This is true here also.

Though earlier, one could have also achieved the requirements of 'releasing funds only after certain conditions are met,' but that was done through separate functions.

In banking, it means that separate Standing Orders need to be set up for daily fund transfers. In the case of stock trading, a separate margin account needs to be maintained.

With "Programmable money," those overheads can be removed, costs can be saved, and those benefits can be passed on to the customer. 

 5. Adaptability and customization:

"Programmable money" provides an unprecedented degree of customization compared to conventional currencies, allowing for the development of investment strategies, programmable financial instruments, and participation in governance.

6. Strategies for Mitigating Counterparty Risk:Smart contracts, fundamental to cryptocurrencies, function autonomously from any form of trust. This indicates that they are programmed to execute automatically upon fulfilling specific conditions.

Consequently, counterparty risk is diminished since transaction execution is no longer contingent on the dependability of an intermediary.

7. Compatibility and integration with the ecosystem: "Programmable money" promotes the transfer of data and value between networks and platforms, including financial systems and platforms; thus, it fosters interoperability and cultivates a financial ecosystem that is more accessible and interconnected.

Use cases for 'Programmable Money ' 

1. Reward and Loyalty points : 

Incorporating "Programmable money" into incentive and loyalty programs, a significant business practice currently complicated by point systems, alternative redemption methods, and transferring points between program partners, is more streamlined and user-friendly.

The streamlining of the generation, supervision, and allocation of loyalty points can be achieved by employing a programmable loyalty token system that has been thoughtfully designed.

2. As "Programmable money" is all about transferring to the beneficiary exclusively upon completing specific stipulations, if someone wants to support sustainability initiatives, "Programmable money" can help here algorithmically.

3. Government programs: Many times, governments run programs for the benefit of society. The government disburses the funds but fails to reach the planned society members.

Also, in some cases, the government wants to check that funds are released only after a particular milestone is met.

In all of these cases, due to intermediaries, funds don't reach the intended beneficiaries, or funds get released even if required work still needs to be done. For example, the government may release funds only after 'the bridge is constructed.'

Or the government may decide to help students who are undergoing specific skill development programs. With programmable money, these conditions can be encoded, and funds will be released only after the desired condition is met.

4. Settlement of supply chain transactions :

Implementing programmable money, which can initiate payment exclusively when certain conditions are met, can revolutionize settling supply chain transactions. Implementing this policy would ensure that all transactions are promptly concluded following the delivery of goods or services.

Moreover, through the acceleration of payment transmission to the magnitude of the Internet, the data linked to transactions may provide enhanced traceability and significantly reduce the need for costly dispute resolution processes.

Programmable currency transforms supply chain management by facilitating traceable transactions; through tokenizing assets on the blockchain, supply chain processes can be made more authentic and resistant to fraud.

5. Trade Finance: Historically, payment instruments and trade documents have been processed using two distinct processes. This results in a comprehensive operational team, which needs to ensure no discrepancy between trade documents ( and conditions specified there) and payment.

Integrating payment and trade data into a single instrument presents an opportunity to transform the present condition of trade financing fundamentally.

6. Medical intervention :

Implementing "Programmable Money" promises to simplify medical payments and expedite the resolution of insurance claims. Further, it could be employed to streamline the reimbursement procedure after the necessary verification standards have been fulfilled.

Programmable currency is being implemented in the healthcare sector to promote transparent data management. Decentralized applications safeguard patient privacy and data integrity by allowing patients to regulate access to their medical records.

7. Management of the Corporate Treasury :

Implementing "Programmable money," which establishes a connection between payments, identity verification, and real-time data, can revolutionize corporate and institutional treasury management.

Adopting this technology would not only prevent fraudulent mismanagement of company funds, but it would also enable real-time payment processing by precise indicators of capital liquidity.

Thus, there would be a significant reduction in the dependence on labor-intensive forecasting models and manual monitoring.

8. Commodities and utilities

"Programmable money" can streamline and accelerate energy invoicing and settlement procedures within the utilities and energy sectors. Moreover, it may facilitate the automation of components of peer-to-peer energy exchange and establish a link between payments and energy usage.

9. Payment for tokenized Assets and NFT: "Programmable money" will ensure that intended owners get a piece of that asset after stipulated conditions are met. 

Can you recall the opulent sports cars that individuals purchased in the past? Let us consider a hypothetical situation in which you, a fraction of these vehicles, share proprietorship with hundreds or thousands of others.

Programmable currency enables tokenizing real estate, automobiles, and artwork, among other assets. Consequently, these entities can be further subdivided into token-based components on the blockchain network.

Privatization of ownership facilitates the investment in valuable assets by individuals who possess reserves. For example, an individual might ponder the potential for acquiring a portion of an artwork such as Vincent van Gogh's "Starry Night" and thereby generate dividend income. 

"Programmable money" helps fund the acquisition of non-fungible tokens (NFTs) and in-game assets, enabling the purchase, exchange, and trading of collectibles within game ecosystems.

Users as individuals are granted the opportunity to acquire and trade tangible resources, whereas game developers can create economies within their respective gaming ecosystems.

10. Creator Economy: "Programmable money" helps in correctly distributing funds, where work-related Intellectual property rights and artwork ownership, etc., are involved.

11. Automated Investments and Savings:

Do you feel inundated by the stock market? "Programmable money," thankfully, provides automated assistants that can be of service.

As an illustration, an individual might appoint a "Robo Saver" to independently allocate a fraction of their earnings to investment portfolios or savings accounts while also considering their expenditure and income patterns. Furthermore, users can program this device to adapt their investments in response to fluctuations in the market.

12. Adaptable Monetary Techniques:

Using contractual agreements, it is possible to incorporate monetary policies seamlessly into the currency. This facilitates stability by allowing for predetermined rule-based adjustments to interest rates, inflation rates, and other economic parameters.

Putting aside concerns about privacy and fungibility, the most intriguing feature of "programmable money" is its ability to incorporate demurrage, an asset that experiences interest rate depreciation. The ability of demurrage to discourage the accumulation of currency may prove beneficial in situations where public funds are employed to stimulate the economy.

13. Cross-Border Banking Activities:

By eliminating the need for conventional intermediaries, "Programmable money" facilitates the optimization of cross-border transactions. Using smart contracts for currency conversion and transaction execution can lead to significant cost savings and processing speed enhancements.

14. Decentralized Borrowing and Lending:

Programmable monetary platforms are comparable to Airbnb for the financial sector.

In contrast to conventional loan applications that involve intermediaries and application procedures, these platforms facilitate direct connections between applicants and lenders, thus removing excessive red tape and barriers.

For example, entrepreneurs might receive direct support through interest-bearing loans extended to international enterprises. Alternatively, programmable money platforms may be utilized by those needing a loan.

"Programmable money," along with decentralization of finance, implementation of ownership models, and automation of tasks, can help build a financial system that is more accessible, inclusive, and rewarding for all could be established.

Defi: Decentralized Finance

A substantial contributor to the growth of the decentralized finance (DeFi) ecosystem is "Programmable money ." Decentralized finance platforms provide financial services by leveraging contracts for lending, borrowing, and decentralized exchanges, thereby eliminating the need for conventional financial institutions.

Salient attributes of programmable currency are as follows:

1. Smart Contracts:

 "Programmable money" enhances transactional transparency and efficiency by facilitating the execution of agreements by predetermined conditions via automated contracts.

2. Constantly Altering the Logic:

  "Programmable money" allows for integrating user-defined logic into transactions instead of fiat currencies. The adaptability creates prospects for the creation of personalized instruments capable of adjusting to evolving conditions.

3. DAO : DAOs are decentralized autonomous organizations.

 "Programmable money" is of utmost importance in facilitating the formation of Decentralized Autonomous Organizations (DAOs), which function via contractual arrangements to optimize governance and decision-making processes instead of traditional organizational frameworks.

The workings of "Programmable money" 

1. Technology for Blockchain Infrastructure:

The "Programmable money" is built upon a blockchain infrastructure comprising distributed and decentralized ledger systems. This arrangement guarantees that every transaction is executed transparently and securely.

2. Smart contracts:

The execution of smart contracts is an essential component of monetary systems. These agreements function independently by requesting that their terms be directly encoded into computer code. Smart contracts obviate the necessity for intermediaries by implementing and enforcing clauses.

3. DApps : DApps are decentralized applications.

Integrating "Programmable money" with decentralized applications (DApps) operating on network infrastructures is common.

Using contractual arrangements, these decentralized applications (DApps) provide an extensive array of services, including marketplaces for non-fungible tokens, DeFi platforms, and gaming experiences.

4. Tokenization:

"Programmable money" facilitates the process of tokenization, in which physical assets or rights are represented on a blockchain using tokens.

These tokens can represent various concepts, including real estate properties. For example, the act of converting artwork into company shares streamlines the ownership and transferability procedures.

5. Oracles:

Oracles are intermediaries that establish connections between blockchain contracts and external data sources. By furnishing contracts with information from the physical world, they enable contracts to produce decisions in response to particular situations or events.

By enabling data exchange and communication between networks, cross-chain interoperability solutions improve the compatibility of programmable currency across multiple platforms.

Future of "Programmable money": The following becomes apparent upon reflection on the future:

1. Using developing central bank digital currencies (CBDCs), central banks may be able to incorporate programmable functionalities into digital currencies. This development could transform monetary policies and significantly foster increased financial inclusivity.

CBDC has the potential to transform the future of payments. It has the capability to generate programmable currency that is restricted to particular purchases.

An instance of this would be when the government issues a stimulus package with spending restrictions on specific products and services.

2.  Advanced Programmable Assets: The tokenization of tangible assets, such as real estate and securities, may enable ownership and the development of financial instruments.

3. Financial Inclusion: Combining monetary and conventional financial systems presents cost reduction and process optimization advantages for businesses and individuals.

As "Programmable Money" will reduce the overall cost of a financial transaction, it will help enhance individual access to various financial services. Moreover, currency-based decentralized applications may enable opportunities for investing, banking, and other activities for marginalized populations around the globe.


The continuous advancement of programmable currency exerts an ever more substantial environmental influence. It facilitates innovative strategies for economic restructuring and organization to promote inclusivity.

Although the expression "programmable money" may have roots in the public blockchain community, it does not inherently require distributed ledger technology in its conceptualization.

Several potential methodologies exist for developing a technological system that provides a programmable digital currency representation.

While the precise technical approach may not be crucial, ensuring that the system functions as a unified product offering rather than a service provision accompanied by non-programmable digital currency is of greater significance.

The notion of money transcends mundane progress; it denotes a fundamental transformation in our understanding, governance, and dealings about financial matters.

"Programmable Money," with its embedded logic into the value, provides users with a more consistent and stable experience than "programmability-as-a-service" models. As more practical examples of programmable money are available to the public, their evaluations of various forms of such "programmable money" will evolve.


Comments: (2)

Dian Cecht
Dian Cecht - Caspa Consulting - Madrid 25 January, 2024, 08:29Be the first to give this comment the thumbs up 0 likes

All that use cases can easily be acomplished with actual software and APIs. The only problem to solve is regulation and programmable money-ish is unregulated. Once it is, you can say goodbye to automation because you'll have to comply with the same requirements actual systems have

Raktim Singh
Raktim Singh - Infosys - Bangalore 25 January, 2024, 13:43Be the first to give this comment the thumbs up 0 likes

Thanks for reading this article and your input. As I have mentioned in the article, we want to again stress on 2 points.

1. In most cases, technology has helped us in reducing the cost. The 'What' part has remained the same, but the 'How' is different. This is true here also.

Though earlier, one could have also achieved the requirements of 'releasing funds only after certain conditions are met,' but that was done through separate functions.

In banking, it means that separate Standing Orders need to be set up for daily fund transfers. In the case of stock trading, a separate margin account needs to be maintained.

With "Programmable money," those overheads can be removed, costs can be saved, and those benefits can be passed on to the customer. 

2. With "Programmable Money," the logic is embedded into the value. In the current system, the value ( amount ) is stored separately. And that is fetched using a function call or API. This a big difference. 

Hope this clarifies.

Now hiring