What Programmable Money Enables

It’s easy to make programmable money sound purely sinister. It isn’t — and being honest about that actually makes the concerns more credible, not less.

There are genuine benefits to programmable money.

Targeted welfare payments that can only be used for food or housing reduces fraud and ensures support reaches its purpose. Instant crisis stimulus — money in every citizen’s account within minutes during a financial emergency — without commercial bank delays. Automatic tax collection without compliance bureaucracy. Conditional grants to businesses that meet certain criteria, verified and enforced automatically.

These are real improvements over how things work now. Governments promoting CBDCs aren’t inventing excuses to control people — they’re solving real administrative problems.

Here’s the thing though.

Every one of those benefits requires exactly the same infrastructure as the concerning capabilities. A system that can restrict welfare spending to approved categories can restrict anyone’s spending. A system that can expire money to stimulate consumption can expire savings. A system that can deliver crisis aid instantly can freeze accounts instantly.

It’s the same pipe. The water that flows through it depends entirely on who controls the tap — and every future government that comes after inherits that control.

Bitcoin’s answer to this is to remove the tap entirely. The rules are in the code and nobody holds the tap. No future government, no matter how well or badly intentioned, can reprogram Bitcoin’s monetary policy.

Whether that tradeoff is worth making is a genuine question. But it’s worth understanding what you’re trading off when you answer it.

Tomorrow: China’s digital yuan — programmable money already in use.

— The Daily Bit