Programmable money: How crypto tokens could change our entire experience of value transfer

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Last month IBM was awarded a patent for a "Bespoke programmable crypto token," the first PM patent awarded in the U.S., co-inventor Jonathan Rosenoer told Cointelegraph Magazine.

What is the status of programmable tokens today? There are few production-level deployments of anything in the DLT/blockchain space, said Rosenoer, but that is likely to change.

Governments could use programmable tokens to enforce economic embargoes.

Programmable money represents a historic shift on how we perceive and use money.

While many forms of such money exist today - most cryptocurrencies are programmable to a higher or lesser degree - much of the discussion around CBDCs involves digital currencies - not money with conditions.

"None of the existing initiatives involve programmatic money in the strictest definition of the term. Indeed, the CBDCs under development today are only programmable by the issuer - the central bank decides monetary supply, functionality, privacy and other characteristics - and not by the end user - i.e. you and I will not be able to write code attached directly to our money, dictating its behavior and movements." While the vision of fully programmable money is closer to reality than ever before, "It will still be some time before governments and central banks go all the way that the private sector has, with digital currencies and decentralized finance."

Gross told us that while programmable CBDCs were unlikely in the U.S. or Europe in the near future, "Programmable tokens will become available as tokenized commercial bank money or e-money in the short-run" - the next one to three years.

"Currently, banks increased their efforts to introduce commercial bank money-backed programmable tokens linked to bank accounts." Government-sponsored projects like CBDC 2.0 might take longer.

Programmable tokens can be used to help achieve environmental goals like ridding the world's oceans of plastic waste.

Gross said there was still a general lack of understanding about the potential benefits of programmable tokens, as well as insufficient collaboration between public institutions - e.g., central banks and governments - and the industrial sector that will be a main user of programmable tokens.