What is Programmable Money?

The term ‘programmable money’ is increasingly bandied about in articles, but what is it? It is largely considered in the context of B2B transactions. Perhaps a few simplistic examples of how it might work best illustrate why it is becoming a ‘thing’.

Imagine you are exporting a product and payment is denominated in your currency. The contract says payment is due when the product is delivered. For this to work, a digital currency (a smart contract that describes what happens and when) and the Internet of Things (IOT) are needed so that a delivery notification is automatically sent. In this case no Letter of Credit is needed as payment is instant on product receipt.

Or imagine you are buying land in an auction. No need to take a certified cheque with you. Instead, earmark funds for the auction in an account or accounts. These funds are only released, by smart contract, when the bidder has won. The transaction is recorded on Distributed Ledger Technology (DLT) with the government land registry.