Programmability in Payment and Settlement
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Summary:
Programmability in payment and settlement has yet to realize its potential to support policy goals such as efficiency, safety, and innovation. This paper proposes a comprehensive framework for understanding and evaluating programmability. It explores two key dimensions: external programmatic access, which is the ability for external participants to access the system data and functions with code, and internal programmatic capabilities, the extent to which internal execution of programs is supported and guaranteed. By developing strategies based on these dimensions, financial institutions, regulators, and related actors can better improve resilience, reduce costs and interoperability, all while managing associated risks. The resulting hybrid systems are coordinated efforts balancing the advantages of permissionless blockchains, such as composability, with regulatory requirements and a wider range of technologies. The paper describes these programmatic models to inform and guide the development of digital finance, bridging policy discussions with technical considerations.
Series:
Working Paper No. 2024/177
Subject:
Blockchain and DLT Financial markets Payment systems Smart contracts Technology
Frequency:
regular
English
Publication Date:
August 16, 2024
ISBN/ISSN:
9798400286452/1018-5941
Stock No:
WPIEA2024177
Format:
Paper
Pages:
33
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