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In his final speech as Deputy Governor for Financial Stability, Jon Cunliffe revealed that the Bank of England (BOE) and HM Treasury (HMT) central bank digital currency (CBDC) consultation paper attracted over 50,000 responses. The majority expressed general, high-level concerns about privacy, programmability and the decline of cash. According to the paper, users of a digital pound would have the same level of privacy that they enjoy today when making electronic payments, and the BOE would not see people's data. Also, neither government nor the BOE would program a digital pound or constrain the uses to which it could be put. It would be for private sector firms to develop and offer, for user consent, payment services involving greater programmability. As regards cash, the government recently legislated to ensure the availability of physical cash to those who prefer to use it and the BOE has made clear that it will provide physical cash as long as there is any demand for it. https://www.bankofengland.co.uk/speech/2023/october/jon-cunliffe-speech-at-the-economics-of-payments-xii-conference

Visa published a paper that outlines how to write a smart contract application for a self-custodial wallet that could allow a user to setup a programmable payment instruction that can push funds automatically from one self-custodial wallet account to another at recurring intervals, without requiring the user's active participation each time.  This solution taps into a concept known as "Account Abstraction", a developer proposal currently being explored within the Ethereum ecosystem. The idea behind Account Abstraction is to make user accounts on Ethereum function more like smart contracts by allowing a user to have programmable features embedded into their wallets.

The Hong Kong Monetary Authority (HKMA) has commenced Phase 2 of the e-HKD pilot programme to delve deeper into innovative use cases and commercial feasibility for new forms of digital money, including e-HKD and tokenized deposits, that can potentially be used by individuals and corporates, within a real-world setting. 11 groups of firms from various sectors will test the settlement of tokenized assets, programmability and offline payments.

"At its core, programmability transforms code into enforceable legal contracts or specific market functions when interacting with tokenized asset values. This "code as law" characteristic inherently constrains intermediaries' discretionary choices. While this constraint helps reduce moral hazard in financial institutions systemically, it also means individual intermediaries will face increasing commoditization. With limited discretion over asset composition and other operational choices, institutions will find it harder to differentiate themselves, likely leading to an erosion of traditional market power as their functions become increasingly automated."

Smart contracts could soon get a boost in bitcoin as prominent programmer Pieter Wuille has unveiled a new coding language designed specifically for their use. The 'Miniscript' language aims to make it easier for programmers to write up "smart contracts" or conditions for spending bitcoins.

Commerzbank was involved in a joint blockchain project with chemical firms BASF and Evonik, who frequently trade with each other. Supply chain payments were verified, paid and logged in a fully automated manner using smart contracts. In other words, it used programmable money or cash on ledger. At a legal level, the digital cash was e-money.

The German private banks rate programmable digital money as an innovation with great potential that can be a key component in the next stage of the evolution of digitalisation.

BitMEX has completed its User Verification Programme, claiming to start 2021 with "a fully verified active user base." BitMEX ramped up the rollout of its know-your-customers (KYC) program on October 21, after the Commodity Futures Trading Commission (CFTC) filed money-laundering and other civil charges against it. The BitMEX Programme had some theet behind it as, according to BitMEX's initial announcement, all its customers who remained unverified by December 4 would have lost the ability to deposit, trade, and withdraw their funds.

HSBC and the School of Business and Management of The Hong Kong University of Science and Technology (HKUST Business School) will run a one-week hypothetical e-HKD proof of concept. The bank will use distributed ledger technology (DLT) to simulate programmable money and instant settlement for retail payments. Around 200 HKUST Business School staff will receive hypothetical eHKD to spend at five campus merchants, such as cafes. They can also receive rewards as a digital token. I'm not certain about this, but it may be running as part of the Hong Kong Monetary Authority (HKMA) e-HKD Pilot Programme announced in May 2023.

The "Blockchain Trilemma" is a term used to describe the challenge of increasing performance, security, and decentralisation at the same time. Current enterprise blockchains are not truly decentralised. They may be structurally decentralised, but are operationally centralised. By reversing this, having structurally centralised, but operationally decentralised architecture, a CBDC can achieve a high-performance blockchain. However, any blockchain-based CBDC should not only solve the blockchain trilemma, but also the CBDC design trilemma, which notes that identity, privacy, and programmability cannot be easily enhanced at the same time. A CBDC cannot ignore privacy for the sake of achieving legal compliance and implementing programmable money. From an expertise point of view, the answer to this trilemma is the use of a decentralized identity system such as self-sovereign identity (SSID) to find the perfect equilibrium for the CBDC design trilemma. Self-sovereign identity is very popular for its advanced privacy protection. By having an SSID-based blockchain system, a CBDC can incorporate both privacy and transparency into the blockchain-based CBDC system. Additionally, a use of zero-knowledge encryption to protect the transaction privacy of blockchain data is highly recommended for any CBDC implementation.

The European Central Bank (ECB) is inviting experts from the payment industry to take part in technical talks, in order to explore options for the provision of programmable payment services in digital euro. The talks will center around the questions regarding retail payments use cases, standards, and back-end IT architecture core payment settlement capabilities. The talks are expected to take place in December 2022. They will be held at expert level as closed sessions with members of the ECB's digital euro project team, and observers from euro area national central banks.

A leaked draft of the proposed Digital Euro Bill, to be proposed by the European Commission on June 28, 2023 will ban remuneration, surcharges and programmability, and make offline payments available from the outset. The regulation aims to ensure a level of privacy equal to taking cash from an ATM during offline, face-to-face interactions, and neither the European Central Bank (ECB) nor the payment service providers will have access to personal transaction data. The draft law also allows the ECB to set holding limits to limit disintermediation risk. Much of this is rather consistent with a slide deck published by the ECB on June 15.

The Bank for International Settlements (BIS) published a paper that provides an overview of policy measures taken in 19 jurisdictions to address the risks associated with activities that incorporate crypto-assets and distributed ledger technology (DLT) programmability capabilities in financial services. The paper classifies policy measures into three categories and identifies different types of initiatives across jurisdictions, including bans, restrictions, clarifications, bespoke requirements, and initiatives to facilitate innovation. It finds that, for centrally managed issuance activities, current regulatory initiatives focus mainly on issuers of security tokens and stablecoins. Initiatives related to centrally managed infrastructure activities mainly explore the benefits and risks from traditional financial intermediaries' use of DLTs and their programmability capabilities. Initiatives related to centrally managed service provision activities often extend the regulatory perimeter to new non-bank centralized intermediaries.

Cambridge University's Centre for Alternative Finance has announced a collaboration with the IMF, the BIS and others to conduct crypto research. The Cambridge Digital Assets Programme, aims to bring further insight into the growing digital asset industry by providing data-driven insights through collaborative research involving public and private sector stakeholders. The research agenda for the Programme will be centered around three workstreams. The first is focused on environmental implications and broader environmental, social and governance (ESG) considerations of digital assets and their associated services. The second will look at the processes and configurations of distributed financial market infrastructure (dFMI), and the third on crypto-assets, stablecoins, central bank digital currency (CBDC), as well as enterprise and consumer tokens.

"Bank of Jamaica (BOJ) is pleased to announce the successful use of its Central Bank Digital Currency (JAM-DEX), as a means of payment to facilitate a critical segment of Government payments - the Employment Generation (Christmas Work) Programme."

The BOE and HMT also published the responses to the digital pound technology working paper also published in February 2023. There was broad support for the six technology design considerations - privacy, security, resilience, performance, extensibility and energy usage. Respondents also suggested additional considerations, such as interoperability, usability, accessibility and scalability. A few respondents suggested models that the BOE judges to not be compatible with the stated policy objectives or design principles, for example models based on anonymous bearer instruments, which will not be taken forward. Most respondents agreed that government or central bank-initiated programmable money should not be pursued, but that user-initiated programmable payments and smart contract functionality would be important for a digital pound system.

The National Bank of Kazakhstan (NBK) launched a pilot project to use its digital tenge CBDC to pay for the construction of a rail line to China. The project uses programmable digital tenge to see that allocated funds reach the intended recipients at the right time. The money allocated to finance the project was "marked" so it is paid only to organizations that have fully fulfilled the required obligations. The marked CBDC was used to enlarge the rail line between Moyynty in central Kazakhstan and Dostyk on the Chinese border across from Xinjiang. https://nationalbank.kz/ru/news/informacionnye-soobshcheniya/16879

Ripple will add smart contracts to the XRP Ledger (XRPL) developer ecosystem and XRPL mainnet, although it's still in its research phase and the firm did not provide a definite time frame for deployment. It also invited programmers familiar with Ethereum virtual machine (EVM) languages to explore possibilities on its sidechain. Ripple also said the sidechain was created for developers using Ethereum-based smart contracts. This gives a familiar environment for deploying DApps, allowing them to use Solidity, a programming language used to build smart contracts on Ethereum. https://ripple.com/insights/expanding-programmability-on-the-xrp-ledger/

Just as the invention of APIs enabled software by allowing systems to communicate and operate autonomously, stablecoins are becoming the financial APIs of artificial intelligence. APIs enable software to seamlessly exchange data and execute tasks without human intervention. Similarly, stablecoins provide the liquidity, programmability and efficiency AI agents need to exchange value and execute transactions in a fully autonomous world. Stablecoins like USDC bring instant, secure and programmable money into the workflows of AI systems. Autonomous agents, operating on behalf of individuals or businesses, rely on fast and efficient monetary systems to optimize their performance. Together, AI and stablecoins are creating a foundation for "self-driving economies," where value moves as seamlessly as data does today.

This study analyzes the impact of digital programmable Euro initiatives on banks, based on interviews with 50 senior experts. We find that both Libra and a Euro CBDC might heavily affect European banks. Experts fear that large-scale financial disintermediation of the financial sector could take place, and digital bank runs could be triggered. Besides these risks, our findings suggest that banks also have the opportunity to develop new business models stemming from these initiatives. Therefore, Libra and a CBDC Euro should not only be seen as threats but also as opportunities.