On the Programmability and Uniformity of Digital Currencies
Year: 2026
Type: article
Abstract: Central bankers argue that programmable digital currencies may compromise the uniformity or singleness of money. We explore this view in a stylized model where programmable money arises endogenously, and differently programmed monies have varying liquidity. Programmability provides private value by easing commitment frictions but imposes social costs under informational frictions. Preserving uniformity is not necessarily socially beneficial. Banning programmable money lowers welfare when informational frictions are mild but improves it when commitment frictions are low. These insights suggest that programmable money could be more beneficial on permissionless blockchains, where it is difficult to commit but trades are publicly observable. (JEL D83, E42, E52, E58)
Authors: Jonathan Chiu, Cyril Monnet
Institutions: Bank of Canada, University of Bern
Language: English
Topic: Economic theories and models
Subfield: Economics and Econometrics
Domain: Social Sciences
Open Access status: green
OpenAlex ID: W7131349006