Bank of England Tells Parliament Digital Currency Will Be Programmed So That It Can Not Be Spent on Things Which Do Not Have "Socially Beneficial Outcomes"

Bank of England tells ministers to intervene on digital currency ‘programming’

The Bank of England has called on ministers to decide whether a central bank digital currency should be “programmable”, ultimately giving the issuer control over how it is spent by the recipient. 

Tom Mutton, a director at the Bank of England, said during a conference on Monday that programming could become a key feature of any future central bank digital currency, in which the money would be programmed to be released only when something happened.

He said: “You could introduce programmability – what happens if one of the participants in a transaction puts a restriction on [future use of the money]?

“There could be some socially beneficial outcomes from that, preventing activity which is seen to be socially harmful in some way. But at the same time it could be a restriction on people’s freedoms.”

He warned that the Government would be required to intervene and make the final decision.

Mr Mutton said: “That is a really delicate debate that needs to be had. It is not something we can settle ourselves, that is for the Government to lead on.”

A digital currency could make payments faster, cheaper and safer, but also opens up new technological possibilities, including programming: effectively allowing a party in a transaction, such as the state or an employer, to control how the money is spent by the recipient.