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Banco Central do Brasil (BCB) published an FAQ on its under-development Drex central bank digital currency (CBDC). "Drex will bring more speed, practicality, and lower cost to various contractual and financial transactions... In the same way that Pix - the Brazilian instant payment ecosystem - has democratized access to payment services, Drex arrives to democratize access to financial services, such as credit, investment and insurance." Programmability through smart contracts on distributed ledger technology (DLT) networks will be a key part of Drex's platform. In the current testing phase, Drex is being developed on Hyperledger Besu.

The Bank for International Settlements (BIS) Innovation Hub announced the development of a prototype developed as part of Project Dynamo that explored how institutional investors can be encouraged to finance small and medium-sized enterprises (SMEs) through the programmability and transferability of digital trade tokens on a public blockchain. The prototype makes use of non-fungible tokens and smart contracts for SME finance. https://www.bis.org/about/bisih/topics/open_finance/dynamo.htm

Hong Kong Exchanges and Clearing Limited (HKEX) is launching "Synapse," a platform that will utilize smart contracts to streamline post-trade flows and enhance operational efficiencies. It will be deployed on Stock Connect, an HKEX channel that enables international investors to access more than 1,000 mainland Chinese stocks through routing in Hong Kong. HKEX will be linked to Hong Kong's Depository Trust and Clearing Corporation through its Institutional Trade Processing service, allowing for the central matching of cross-border transactions. Settlement instructions are then automatically generated and sent back to the Synapse platform, thus enhancing the trade confirmation workflow. https://www.hkex.com.hk/News/News-Release/2023/231004news?sc_lang=en

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").

S&P Global has published a smart contract explainer. Using smart contracts in financial transactions can improve efficiency and reduce reliance on third parties like asset servicers and custodians, as well as make transaction resolutions faster--enhancing creditworthiness and the integrity of business dealings. However, smart contracts have had slow and limited adoption in the financial markets owing to key risks including technology issues (such as incorrect coding) and legal and regulatory ambiguities that make accountability difficult.

The People's Bank of China (PBOC) has reportedly launched an eCNY smart contract prepaid fund management product - "Yuanguanjia". It aims to provide users with prepaid consumption service scenarios by deploying smart contracts on digital RMB wallets. This stops merchants from running away with prepaid consumption and protects consumers' rights and interests.

Intended to prevent unscrupulous merchants from embezzling prepayments made by buyers, a new digital yuan management tool has been unveiled. Merchants can apply to execute the smart contract when they complete services that consumers pay for, and the contract will transfer the prepaid funds to the merchants after verifying that all conditions have been met. This technically rules out the possibility of embezzling the prepayments via artificial operations.

It's a mistake to defend DAOs on the grounds that code is free speech. Some code is speech, but not all code is speech. And code can also directly affect the world. DAOs, which are in essence autonomous golems, made from code rather than clay, make this distinction especially stark. This will become even more important as robots become more capable and prevalent. Robots are even more obviously golems than DAOs are, performing actions in the physical world. Should their code enjoy a safe harbor from the law? What if robots, like DAOs, are designed to obey only their initial instructions, however unlawful-and refuse all further updates or commands? Assuming that code is free speech and only free speech, and ignoring its functional purpose, will at best tangle the law up in knots. Tying free speech arguments to the cause of DAOs like Tornado Cash imperils some of the important free speech victories that were won in the past. But the risks for everyone might be even greater if that argument wins. A world where democratic governments are unable to enforce their laws is not a world where civic spaces or civil liberties will thrive.

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.

The Bank for International Settlements (BIS) proposed a new type of financial infrastructure that would combine central bank digital currency (CBDC) with tokenized bank deposits and other tokenized claims, on a programmable platform on a unified ledger. The BIS claims that "eventual benefits would go beyond faster speeds and lower costs, to enable entirely new types of transaction, limited only by the ingenuity of public and private innovators... Examples include new methods for securities settlements that combine all the individual steps into one seamless transaction, tokenized deposits with built-in regulatory checks that simultaneously settle in wholesale CBDC, smart contract-enabled credit that reduces the cost of trade finance for smaller companies, improving global supply chains, enhanced sharing of data on potential borrowers, and using privacy-protecting technology, to expand access to credit for disadvantaged segments of the population."

"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. "

The Thai Prime Minister reportedly announced a 10,000 baht handout of "time stamped" blockchain-based digital money to the 50 million Thais earning less than 70,000 baht per month. It is time stamped in that recipients must begin spending the money within six months on food, nonalcoholic beverages and consumer products bought in stores, and only within their electoral districts.

State Grid Suzhou Power Supply Company reportedly completed the first digital yuan smart contract transaction in the solar power industry. The deal was struck the CBDC with the materials and textiles firm Suzhou Shicheng Material Technology that had struck a smart contract loan-type financing deal with a local bank branch. After Suzhou Shicheng Material Technology used electricity over an agreed period, State Grid Suzhou Power Supply issued a bill, causing the contract to close, and Suzhou Shicheng Material Technology's digital yuan wallet was automatically debited after the issuance of the bill.

Binur Zhalenov, CEO of the National Bank of Kazakhstan National Payments Corporation, has described a pilot that uses digital tenge smart contracts to optimize government subsidies, in this case involving school canteen subsidies. Each school student in Almaty has an "ONAY!" transportation card. When a student uses this card in the school canteen, a smart contract is triggered that transfers digital tenge from the school's account directly to the canteen operator's account, but only when the student actually receives the service. This significantly cuts down on unnecessary reporting, canteens receive funds instantly after providing services, and ensures clear visibility of government fund usage.

Bank for International Settlements (BIS) General Manager Agustín Carstens called for  the development of a  "unified ledger" that would allow different parts of the digital financial ecosystem to work together seamlessly. More specifically, such a ledger could bundled together central bank digital currencies (CBDCs) and tokenized deposits, linked with smart contracts, to create a "money Lego" ecosystem. And Mr. Carstens claimed that all of a unified ledger's potential benefits  could be achieved on permissioned platforms with various degrees of centralization.

The IMF published a blog post that makes the case for leveraging the technology behind crypto-assets to upgrade payment infrastructures and ensure interoperability, safety, and efficiency in digital finance. It points particularly to tokenization, encryption, and programmability, plus central bank digital currencies (CBDCs) to clear and settle transactions. Payments could be made from one private money to another, through the CBDC ledger or platform. Money could be escrowed on the CBDC platform, then released when certain conditions are met, such as when a tokenized asset is received. And the CBDC platform could offer a basic programming language to ensure smart contracts are trusted and compatible with one another. More detail on these ideas were published in a recent IMF working paper ("A Multi-Currency Exchange and Contracting Platform"). https://www.imf.org/en/Publications/WP/Issues/2022/11/04/A-Multi-Currency-Exchange-and-Contracting-Platform-525445

The European Commission has released its proposal for the union's new Data Act. Among other things, it would mandate that applications using smart contracts include "internal functions which can reset or instruct the contract to stop or interrupt the operation to avoid future (accidental) executions." Fears are being expressed that such "kill switches" could threaten the promise of immutability because, with the ability of a single source to make a change, the contract is no longer autonomous.

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.

DeFi platforms aim to improve upon the traditional financial system by combining two innovations: a "smart contract" transaction technology and a "token holder" governance model. Although DeFi's transaction technology promises to reduce costs in some applications, it cannot, on its own, redistribute these economic gains to users. To achieve their goal, DeFi platforms must be governed in a way that is consistent with users' interests. So far, however, DeFi has not decentralized decision-making power to users in the way its proponents had hoped. Future progress in DeFi will require not only technical advances in smart contract and distributed ledger design but also economic solutions to the governance problems faced by these platforms.

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.