The future of money is programmable.
Programmable money represents a historic shift on how we perceive and use money.
Programmable money is money with constraints.
Technically, programmable money is digital currency attached to blockchain-enabled smart contracts. #CBDC
An analogy is food stamps where recipients are given coupons, the equivalent of money, which can be spent only on food — not on alcohol, betting on horses, lottery tickets or anything else.
I could create digital currency that can only be held by credentialed refugees and transferred to credentialed businesses.
“A charity or refugee agency can issue the credential to the refugee. The businesses can be similarly accredited. Then the programmed tokens representing funds can be issued to the refugee and held on his/her phone. The refugee can use them to pay for goods and services from accredited businesses, only. The refugee could also transfer them to other refugees.”
A programmable token could strengthen controls around aid payments, tracking and tracing flows on a national level, using link analysis to uncover fraud and corruption. #CCT
Where are payments going? Why is so much flowing to one place? “That’s the real promise,” said Rosenoer — rooting out the institutional corruption that keeps poor people poor. The developing world needs a tool like this — much more so than the U.S. or Europe “where lots of things are [already] good enough.”
Use case (social):
Programmable tokens can be used to help achieve environmental goals like ridding the world’s oceans of plastic waste. During a coastal cleanup last year of the Manila Bay, for example, local fishermen collected 3 tons of trash — most of it plastic — and were paid for their labor with an Ethereum-based ERC-20 token. Coins.ph (a partner on the ground) helped to convert the crypto into fiat currency. Efforts like these appear to offer an ingenious solution to two seemingly intractable problems: poverty in the developing world and ocean plastic waste.
The future of programmable money – you and I will be able to write code attached directly to our money, dictating its behavior and movements.
Use case (finance): Automated payable/receivable statement
Programmable money could enable global financial transactions that preserve compliance with local laws and regulations, suggested Rosenoer: “Assume that you have a tokenized asset that you want to sell. Let’s call it a long-term debt. The law says that I can only sell it to an accredited investor — one that has a certain amount of net assets and annual income — or I can sell it to a foreign investor.” These are classes of people defined by law. If Rosenoer sells his asset to them, they may have to hold the asset for a period of time if they are subject to U.S. jurisdiction, and then they can only sell to an accredited investor or a foreign investor.
“I can program my token to ensure that whoever holds it meets these requirements,” continued Rosenoer.
This means that I do not have to, for example, create whitelists and blacklists. The token carries the restriction and someone else can issue the credential that meets the requirement(s).