Programmable Bank Money

Definition ∞ Programmable Bank Money refers to digital representations of traditional fiat currency held in commercial bank accounts, endowed with the capability for automated execution logic via smart contracts. This innovation allows for conditional payments and complex financial operations to be hard-coded into the money itself. It combines the stability of bank deposits with the automation of blockchain technology.
Context ∞ This term is gaining prominence in financial news, particularly in discussions surrounding central bank digital currencies (CBDCs) and tokenized deposits. Its potential to revolutionize payment systems, enable atomic settlements, and introduce new financial products is a significant area of focus. Regulators and financial institutions are actively exploring its implications for monetary policy and market efficiency.