Programmable money: A true contactless system

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  Quantumrun Foresight
• July 21, 2023

Insight highlights

Programmable money driven by smart contracts and digital automation promises personalized and efficient financial transactions seamlessly integrated into consumer experiences. Such technologies enable real-time payments based on predefined criteria and governance, ownership, and record-keeping in a decentralized economy. However, their wider implications span from increased financial inclusion and reduced transaction costs to potential challenges in regulation enforcement and cybersecurity threats.

Programmable money context

Automating and digitizing monetary transactions offer a platform for standing orders to mirror more complex and personalized investor strategies. An example is a balanced investment portfolio tailored to individual risk tolerance and financial goals. This technology can be integrated into digital wallets, automating real-time consumer payments. These transactions would be based on predefined criteria, eliminating the need for payment selection at the point of transaction. This level of automation could enhance efficiency, optimize personal financial management, and ensure seamless transactional experiences.

Smart contract technology is what's driving programmable money. Coding "if this, then that" actions into financial instruments brings the automation of contractual obligations to a whole new level. Smart contracts not only self-execute but can also be personalized for complex operations that apply to gaming, real estate, legal, and more. These contracts are becoming the foundational elements of the decentralized economy, where critical functions are automated, such as governance, ownership, and record-keeping. 

Neo-banks and similar financial platforms built on credit card networks are now using automated transaction authorizations. This feature enables dynamic purchase limitations so cardholders do not exceed predefined spending limits or transact with specific merchants or sectors. For instance, Greenlight, a start-up with a user base of over 4 million, offers a debit card with parental controls and a mobile app. Parents can leverage these features to block particular stores, set spending limits, and even program rewards or certain behaviors. 

Disruptive impact

The potential influence of programmable money spans various industries and entities. In scenarios of economic downturns, governments could use programmability to efficiently and securely distribute financial aid—referred to as "helicopter drops"—to citizens as a method of stimulating the economy. In banking, this technology could empower financial service providers to concentrate on boosting efficiency while delivering innovative services to their customers. 

For business-to-business (B2B) transactions, programmable payments could automate payments, allowing for the simultaneous exchange of products and services. Moreover, companies could cut down on their processes' complexity and even enable payments through the Internet of Things (IoT). Consumers also stand to benefit from programmable features, as these advancements could streamline payments.

Looking specifically at the manufacturing and industrial sectors, machine-to-machine programmable payments could revolutionize operations. Imagine a scenario where machines could independently order their components and supplies when their stock depletes. Similarly, for smart metering, electric vehicles could autonomously pay for recharging through a pre-established smart contract, eliminating the need for human interaction in the transaction process. Integrating programmable payments within the IoT landscape could be a precursor to entirely new business models. 

Meanwhile, using blockchain technology for treasury management can monitor the status of accounts from various entities across the globe in real time. This instant visibility can significantly enhance decision-making capabilities. It can provide improved cash flow predictions, enabling managers to make more informed and timely decisions. 

Implications of programmable money

Wider implications of programmable money may include: 

• Financial services to unbanked or underbanked populations. This greater accessibility could reduce social inequality over the long term and empower individuals with more economic independence.


• The transaction costs associated with money transfers significantly decreasing due to the removal of intermediaries, leading to greater efficiency in the economy. 


• Central banks losing some of their control over the money supply, affecting national economies. This trend could lead to a rethinking of economic and political strategies at a national and global level.


• The shift to programmable money widening the digital divide, particularly among older populations and in regions with less technological infrastructure. This shift might require initiatives to improve digital literacy and infrastructure.


• Increased cyber threats requiring a more robust cybersecurity framework. Over time, there might be a surge in innovations and advancements in cybersecurity.


• The energy consumption of these blockchain systems becoming a significant environmental concern, prompting a search for more energy-efficient consensus algorithms and techniques.


• Challenges in enforcing financial regulations, including anti-money laundering (AML) and know-your-customer (KYC) rules. This trend could lead to new regulatory frameworks or the adaptation of existing ones.


• New jobs in fintech, digital currencies, and blockchain technology leading to a shift in labor market demands. At the same time, traditional banking and finance roles might be redefined or reduced.

Questions to consider

• If you’ve used smart contracts before, what do you like most about them?


• How else can programmable money change how people make financial transactions?