Runaway time review:
Programmable currency (PM) is spreading. It may become the next stage of currency evolution, and it is as disruptive as any financial technology currently under development.
Yes, China is about to launch its first central bank digital currency (CBDC) on a large scale—perhaps within 12 months—but even so, it will be replaced by CBDC 2.0 before the end of the new decade. Digital currency based on blockchain smart contracts. At least, this is the current view of many people.
Programmable currency is a currency with constraints. For example, food vouchers are shopping vouchers that people receive that are equivalent to money, but they can only be used to buy food—not to buy wine, bet on horses, buy lottery tickets, or other things. In modern terms, these “food stamps” can be digital tokens traded using smart contracts on a blockchain platform.
Last month, IBM received a patent, “Custom Programmable Encryption Token,” co-developer Jonathan Rosenoer told the media that this is the first PM patent that IBM has obtained in the United States.
“A slow fermenting tsunami”
Jonas Gross, research assistant and project manager of the Frankfurt School Blockchain Center (FSBC), said, “There is more and more discussion about programmable tokens.” The center is a think tank of the Frankfurt School of Finance and Management. For example, in Germany, the Ministry of Finance has just established a working group to study the development of programmable euros in cooperation with the German Central Bank.
“The new crown epidemic is forcing a tsunami about programmable currencies to slowly emerge,” said Gert Sylvest, co-founder of the business platform Tradeshift. It will accelerate the transition of e-commerce to programmable currencies. Since the pandemic, “we have seen people’s interest in related fields have greatly increased,” especially when liquidation crises including slow payment speeds followed. He said that many people are ready to provide programmable currency, including automated/payable/receivable settlement, brand new.
With the approval of IBM’s new patent, the parameters of encrypted tokens—constraints—can be stored in the token itself, or “in the on-chain or off-chain database referenced by the hash identifier stored in the token. “In the view of co-founder Rosenoer, encrypted tokens have the potential to promote many social/economic goals, including providing humanitarian assistance during natural disasters or wars. for example:
“I can create a digital currency that can only be held by certified refugees and can only be transferred to certified merchants.”
“A charitable organization of a refugee agency can issue certificates to refugees. Similarly, they can also provide certification to merchants. Then funds can be issued to refugees in the form of programmable tokens and stored on his/her mobile phone. Refugee These tokens can be used to buy food or obtain services from trusted merchants, but only for this. Refugees can also transfer these tokens to other refugees.”
The creator of programmable tokens can be individuals (“You can create your own AndrewCoin”), businesses, charitable organizations, banks, governments and other entities, he added. On the back end, auditors receive automated reports on token holders and usage. “Unexpected patterns that imply plunder or blackmail will trigger alarms and accident handling,” Rosenoer pointed out. (“Resource plundering” is a big problem in the implementation of humanitarian relief. Even if the relief supplies arrive at their destinations, recipients are sometimes robbed-this is another problem that programmable currency can alleviate.)
What is the current development of programmable currencies? Rosenoer pointed out that there are very few that can reach the level of production in the blockchain field, but this situation may change. Governments can use programmable currencies to enforce economic sanctions. For example, a token that can be programmed can be realized in any country—except for sanctioned countries like North Korea or Iran. He pointed out, “The employees of start-ups are advancing the development of use cases.”
(To be continued)
