The Programmable eRs: Where code meets currency

This higher level of trust and speed could open up new business models and encourage new ideas, especially in areas that are ready to be automated. Various organisations are already testing programmable allowances for things like newspaper allowances, which shows how this technology can be used in real life in company finance.

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Introduction

The global financial landscape is on the edge of a sweeping transformation with the emergence of Central Bank Digital Currencies (CBDCs). While this concept of a digital form of fiat money issued by a central bank is gaining traction, a particularly innovative and fascinating feature is "programmability."

The idea of programmability or Programmable CBDC is not just about making a digital version of the rupee, but it is a leap forward to make the Indian rupee dynamically intelligent which has the potential to transform the country's huge economy, making the people to access the money differently, making subsidy drops efficient and much more. It's about making a digital rupee that can act on its own based on preset rules. This will allow for unprecedented speed, accuracy and policy effectiveness.

How is it different to normal CBDC?

The main feature that makes a Programmable CBDC different from other types of money is that it can work automatically. Programmable money has directions built into its digital code, unlike the cash we carry around with us or the transactions in our bank accounts that don't change. These rules say how, when and by whom the money can be used and viewed. They are usually powered by advanced smart contract technologies that are similar to those found in decentralized blockchain networks. Let us see few examples of Programmable CBDC:

Case 1: Let us Imagine that farmers receive government subsidies for fertilizers that can only be used at authorized fertilizer stores against purchase of fertilizers.