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This article argues that it is important to distinguish between programmable money and programmable payments because they have different use cases. The example of the e-car is a good use case for a programmable payment. However, the programmability of money is not necessary in this case. Instead, programmable money can be used, for instance, to implement targeted aid payments during crises such as COVID-19. By giving the money paid out to citizens an inherent logic, the government could ensure that the subsidies are spent in a timely fashion and only for predefined things such as food, medicine, or clothes.

The Bank of Japan (BoJ) published a paper that summarizes programmability and related concepts. It shows that programmability can be found in existing payment and settlement mechanisms, and that programmability does not necessarily depend on distributed ledger technology. It then discusses how programmability is paving its way to play more important roles in future payment and settlement systems, including via embedding the programmability into the money itself ("programmable money").

"Programmable money" is, without doubt, one of the major buzzwords in the blockchain space in 2020. Even though everyone seems to talk about it, we still lack a clear definition and hence common understanding of this term. In this article, we present a taxonomy of programmable money. In particular, we argue that "programmable money" has to be differentiated from "programmable payments". To make this distinction as clear as possible, we develop a framework in which we decompose the payments value chain into three pillars: the contract execution system, the digital payment infrastructure, and the monetary unit.

Even if these problems for the various forms of programmable money can be overcome, it still leaves the question of what is programmable money for? Robert Sams points to the general potential for innovation, "More likely are the use-cases that don't even exist today and can't exist without programmable money. Use-cases where the contractual form of the deal is changed due to the capabilities of programmable money." Aleksi Grym (head of digitalisation at the Bank of Finland) has a less optimistic view. "Generally, I'm not a fan of new words for old concepts, so in this case I'm asking myself, what would a normal person call 'programmable money'? I think the answer is 'conditional payment'."

"This paper studies the desirability of programmable payments where transfers are automatically executed conditional upon preset objective criteria. We do so by studying optimal payment arrangements in a framework that captures a wide range of economic relationships between two parties. Our framework stacks the cards in favor of programmable payments by considering an environment without legal recourse. The results show that the optimal payment arrangements for long-term economic relationships consist predominantly of simple direct payments. Direct payments increase the surplus by avoiding the liquidity cost of locking-up funds from the moment where the payer commits the funds in a programmable payment until the moment where the conditions are satisfied to release those funds to the payee. Programmable payments will be desirable, and may in fact be the only viable payment arrangement, in situations where economic relationships are of a short duration. "

"When talking about the programmability of central bank digital currency, one delineation needs to be made clear - the difference between programmable money and programmable payments. The two terms are often used interchangeably, but they actually refer to two very different things."

The Reserve Bank of India (RBI) plans to add programmability and offline payments to its central bank digital currency (CBDC) pilot. "Programmability will facilitate transactions for specific/targeted purposes, while offline functionality will enable these transactions in areas with poor or limited internet connectivity." It sounds like programmability will take the form of "purpose-bound money" that embeds ("bounds") programming logic denoting its use based on programmed conditions that becomes "unbounded" once those conditions are met. https://www.rbi.org.in/Scripts/BS_PressReleaseDisplay.aspx?prid=57277

We often hear that modern money just isn't up to snuff because it isn't programmable. That's why we need Ethereum, stablecoins, and other exotica like central bank digital currencies. These platforms will provide the world with much needed programmability. However, we've had programmable money for ages. For example, programming COVID relief didn't require anything fancy like Ethereum or stablecoins. The card networks make it easy to do this sort of thing.

A joint study by the German Federal Ministry of Finance and the Deutsche Bundesbank concluded that demand for programmable payments is rising in Germany. Smart contracts could be incorporated into conventional payment systems, but the extent to which they can be implemented and applied is limited. However, tokenized commercial bank money and central bank digital currency could bring the greatest functional benefit in terms of settling programmable payments. Both options are well-suited settlement solutions for programmable payments on account of the expected credibility of their issuers and their use within a binding legal framework.

The Hong Kong Monetary Authority (HKMA) launched phase 2 of the e-HKD pilot programme. Phase 1 was completed in October 2023 and had studied domestic retail use cases in various areas such as programmable payments, settlement of tokenized assets, and offline payments. Phase 2 will delve deeper into select pilots from phase 1 where an e-HKD could add unique value, such as programmability, tokenization and atomic settlement, as well as explore new use cases that have not been covered in the previous phase. Organizations interested in participating in phase 2 have been invited to submit applications by May 17, 2024.

Canada's Centre for International Governance Innovation (CIGI) Digital Policy Hub published a paper by Ori Freiman on central bank digital currency (CBDC) governance, focusing particularly on programmability and privacy/surveillance. Although programmable money and payments can support social policies, they also raise questions about the authorities' influence and control, and how to ensure there is no abuse of power. Privacy is a significant CBDC design challenge because meeting financial integrity (e.g., AML/CFT) requirements while offering cash-like anonymity seems incompatible. Authorities' access to citizens' data could lead to state-level surveillance, threatening civil liberties and human rights. Even if safeguards are put in place, CBDC infrastructure could be changed and initial safeguards overridden, rendering this risk a time-consistency problem. Eleven policy recommendations are suggested on privacy and data rights, accessibility, public participation and oversight, prohibiting programmable money, legislation protecting cash and more.

First Abu Dhabi Bank (FAB) is the first financial institution to pilot JPM Coin programmable payment functionality. FAB's trials included initiating payments based on time triggers and balance thresholds, for example, the transfer of funds out of an account if the balance is too high, or into the account if it's too low. Or, a planned payment is only sent out depending on its impact on the account balance. https://www.bankfab.com/en-ae/about-fab/group/in-the-media/fab-successfully-pilots-programmable-payments-through-onyx-by-jp-morgan

On July 30, 2024, the Bank of England (BOE) published a paper on its proposed approach to innovation in money and payments. It includes developing additional functionalities for the real-time gross settlement (RTGS) system such as extending settlement hours and a synchronization interface that would allow RTGS to connect to external ledgers, including those based on programmable platforms, and settle assets in central bank money. The bank is also planning a programme of experiments for a wholesale central bank digital currency (CBDC). Broadly these would cover, DvP securities transactions, PvP foreign exchange transactions and interoperability with other global ledger initiatives. The use of tokenized money and programmable payments is also up for discussion. https://www.bankofengland.co.uk/paper/2024/dp/the-boes-approach-to-innovation-in-money-and-payments

While "programmable money" as a term may have originated in the public blockchain community, as a concept it need not involve distributed ledger technology at all. There are multiple possible approaches to the design of a technological system offering a digital representation of money with an associated programming facility; what is more important than the specific technical approach is the guarantee that the system will in fact cohere into a unitary product offering, rather than a service offering associated with an otherwise independent non-programmable digital money.

Visa developed a programmable finance platform that allows Brazilian soybean farmers to securely fund and sell their crop harvests on a permissioned version of the Ethereum blockchain. Partnering with Agrotoken, Microsoft, and Sinqia, Visa was one of nine finalists tasked with exploring innovative blockchain-based use cases for Brazil's real digital central bank-issued digital currency (CBDC) as part of the Banco Central do Brasil's most recent LIFT Challenge. The CBDC's programmability allows delivery and payment of assets and currencies to be automatically settled only when certain conditions are met, for more efficient capital usage and reduced counterparty risks. https://usa.visa.com/about-visa/newsroom/press-releases.releaseId.19706.html

IndusInd Bank successfully implemented the Reserve Bank of India's (RBI's) programmable central bank digital currency (CBDC) pilot. It was executed as an alternate form of CBDC wherein the bank can program the end use of funds being disbursed to farmers in lieu of generation of carbon credits. IndusInd Bank initiated the programmable CBDC disbursement to 50 farmers in Ratnagiri district of Maharashtra, which will expand to 1000 farmers. Phase 2 of the project will focus on Safai Karmacharis, aiming to increase their income by leveraging revenues generated from the collection, recycling, and repurposing of plastic waste.

The Bank of Thailand (BoT) will test programmable payments in its Enhanced Regulatory Sandbox. Programmable payments automate transaction with predefined conditions for the payment of goods and services. This project will demonstrate the potential for applying technology to a wide variety of financial services, accompanied by appropriate risk management processes. The BOT will work in collaboration with the Securities and Exchange Commission, the Office of Insurance Commission, and the Fiscal Policy Office, Ministry of Finance, to evaluate the benefits and risks of financial innovations and to establish potential and suitable supervisory policies.

The BIS Innovation Hub (BISIH) posted its 2025-26 work programme. The BISIH started 16 new projects in 2024, and the project portfolio consisted of 26 active projects at the start of 2025. The work programme for 2025 includes further developing ongoing projects such as Project Agora in which partners from seven central banks and over 40 private sector financial institutions are exploring how tokenization can enhance wholesale cross-border payments. The first two new projects in 2025 will explore AI-based tools supporting supervision and green finance. https://www.bis.org/about/bisih/about.htm

The Hong Kong Monetary Authority (HKMA) today announced the commencement of the e-HKD central bank digital currency (CBDC) pilot programme. A total of 16 firms from the financial, payment and technology sectors have been selected to participate in the first round of pilots. The pilots will take deep dives into potential use cases in six categories, including full-fledged payments, programmable payments, offline payments, tokenised deposits, settlement of Web3 transactions and settlement of tokenised assets. https://www.hkma.gov.hk/media/eng/doc/key-information/press-release/2023/20230518e4a1.pdf

Onyx by JP Morgan has launched programmable payments for blockchain-based accounts on JPM Coin. The solution allows users to use an if-this-then-that interface to program their transactions. Customers can control their JPM Coin accounts in new ways such as dynamic funding, in which they can apply various rules for funding a bank account in case of shortfalls, and event-based payouts, in which they can execute transactions depending on various needs such as delivery of assets. On November 6, Siemens AG completed its first payment using the feature, and FedEx and Cargill will be going live with the solution in the next few weeks.