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Programming Money Without Programmable Money

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Abstract

Programmability is at the heart of ongoing work on the future of money and payments by central banks around the world. Despite its potential, there is growing concern that programmability conflicts with the provision of “good” money. This paper overviews key principles of “good” money and argues that the discourse on programmability inadequately differentiates between programmable money, which is generally negatively viewed, and programmable payments, which is generally accepted as part of the future. We provide a framework for programmable monetary systems that sharply distinguishes between programmable money and programmable payments. We show that our framework nests a broader set of financial arrangements and revisit the debate on programmability in the design of monetary systems.

Suggested Citation

  • Michael Junho Lee & Antoine Martin, 2026. "Programming Money Without Programmable Money," Staff Reports 1180, Federal Reserve Bank of New York.
    • Handle: RePEc:fip:fednsr:102413
    DOI: 10.59576/sr.1180
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    References listed on IDEAS

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    1. Bengt Holmstrom, 2015. "Understanding the role of debt in the financial system," BIS Working Papers 479, Bank for International Settlements.
    2. Charles M. Kahn & Maarten R.C. van Oordt, 2022. "The Demand for Programmable Payments," Tinbergen Institute Discussion Papers 22-076/IV, Tinbergen Institute.
    3. Michael Junho Lee & Antoine Martin & Robert M. Townsend, 2024. "Zero Settlement Risk Token Systems," Staff Reports 1120, Federal Reserve Bank of New York.
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    Keywords

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    JEL classification:

    • E42 - Macroeconomics and Monetary Economics - - Money and Interest Rates - - - Monetary Systems; Standards; Regimes; Government and the Monetary System
    • E58 - Macroeconomics and Monetary Economics - - Monetary Policy, Central Banking, and the Supply of Money and Credit - - - Central Banks and Their Policies
    • G28 - Financial Economics - - Financial Institutions and Services - - - Government Policy and Regulation

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