The proposed ~$280 handout has all the hallmarks of a programmable , including expiry dates & geolocation-based restrictions: perspective CBDC Thailand’s Pheu Thai Party says that once it came to power, it would give all citizens 16 years and older a handout of approximately $280 that could only be spent within four kilometers of their homes and would expire after six months. In a move intended to both as well as lay the foundations for a digital economy, the 10,000 baht (~$280) programmable handout would be sent to the digital wallets of each eligible citizen who had the application on their smartphone. stimulate the economy For those without the smartphone app, Pheu Thai Party deputy secretary-general Paopoom Rojanasakul said, “There would be no problems […] as they could use their national ID card to get a personal code instead,” the reported. Bangkok Post “Rojanasakul, who is also the spokesman for its economic committee, said that a Pheu Thai-led coalition government in the making would implement the promised policy once it comes to power,” . according to The Nation The proposed handout was originally , but it was put on pause after the Pheu Thai Party came in second in the May 14 election, but the policy was revived last Friday. announced in April “The Pheu Thai party, which won the second-highest number of seats, will lead a government” “Thailand’s Pheu Thai Party Takes Control—But at a Long Term Cost,” Joshua Kurlantzick, Council on Foreign Relations Thailand’s prime ministerial vote is expected to take place sometime between August 18 and 22. , “Pheu Thai will nominate for prime minister Srettha Thavisin, a former real estate mogul with no political experience up until the election. According to Reuters “To succeed, Srettha needs support from more than half of the joint lower and upper houses, an outcome far from certain.” The Pheu Thai Party was the runner-up to the Move Forward Party in the election last May, and the two parties formed a short-lived coalition before splitting in July. “With Move Forward now consigned to the opposition, it is almost certain that Srettha will be confirmed as prime minister,” writes (CFR) senior fellow Joshua Kurlantzick. Council on Foreign Relations “New capabilities such as programmability, composability and tokenization are not the preserve of crypto, but can instead be built on top of central bank digital currencies” Bank for International Settlements, Annual Economic Report, 2022 The Pheu Thai handout scheme has all the hallmarks of what a (CBDC) could look like, including blockchain technology and programmability features like and placing transaction restrictions based on a person’s geolocation. Central Bank Digital Currency setting expiry dates However, the Bank of Thailand, which currently opposes the handout scheme, is still in the CBDC , and the country hasn’t officially adopted a CBDC. trial stage It remains to be seen whether the handout would actually stimulate the economy or lead to more inflation, but the digital infrastructure laid could very well lead to a digital ID-based CBDC in the long run. And it’s not just Thailand that is exploring a programmable digital currency. Well over 100 central banks are currently exploring programmable CBDCs, and they all take their cue from organizations like the (BIS), the (IMF), and the (WEF) when it comes to CBDC policy and implementation. Bank for International Settlements International Monetary Fund World Economic Forum When bankers and economists talk about programmability in token-based CBDCs, they are talking about rules being applied to when, where, and how you can spend your money. “ “ You could have a potentially […] darker world where the government decides that units of central bank money can be used to purchase some things, but not other things that it deems less desirable like say ammunition, or drugs, or pornography, or something of the sort Eswar Prasad, WEF Annual Meeting of the New Champions, June 2023 https://twitter.com/TimHinchliffe/status/1674105699897311253?embedable=true Speaking at the WEF’s 14th Annual Meeting of the New Champions, aka “ ,” in Tianjing, China this year, Cornell University professor Eswar Prasad said that “ ,” and that programmable CBDCs could take us to either a better or much darker place. Summer Davos we are at the cusp of physical currency essentially disappearing “If you think about the benefits of digital money, there are huge potential gains,” said Prasad, adding, “It’s not just about digital forms of digital currency; . you can have programmability — units of central bank currency with expiry dates “You could have […] a potentially better — or some people might say , and that is very powerful in terms of the use of a CBDC, and I think also extremely dangerous to central banks,” he added. a darker world — where the government decides that units of central bank money can be used to purchase some things, but not other things that it deems less desirable like say ammunition, or drugs, or pornography, or something of the sort While Prasad highlighted that programming CBDC for economic or social policies could affect the integrity of central banks, European Central Bank president Christine Lagarde recently explained that programmability would be left to intermediaries like commercial banks. “For us [central banks], the issuance of a digital currency that would be central bank money would not be programmable […] Those who can associate the use of digital currency with programmability would be the intermediaries — would be the commercial banks” Christine Lagarde, BIS Innovation Summit, March 2023 https://twitter.com/TimHinchliffe/status/1645821787899346945?embedable=true Speaking at the BIS in March, Lagarde told her fellow panelists that a central bank would not be in charge of programming a digital currency. Innovation Summit “ ,” said Lagarde. For us [central banks], the issuance of a digital currency that would be central bank money would not be programmable — would not be associated with any particular limitation, whether it’s in time, in type of use — that to me would be a voucher. It wouldn’t be a digital currency “ . Those who can associate the use of digital currency with programmability would be the intermediaries — would be the commercial banks “And that’s their business. They know how to do that, but if we are to say that a dollar is a dollar, whether it is cash or digital; or a euro is a euro, cash or digital — then for us [central bank] it cannot be programmable. “It can be associated with conditionality, which is different, but not programmable,” she added. “ “ By programming CBDC, those money can be precisely targeted for what kind of people can own and what kind of use this money can be utilized Bo Li, IMF, October 2022 https://twitter.com/TimHinchliffe/status/1581058535609495552?embedable=true Speaking at a high-level roundtable on CBDC in Washington, DC in October 2022, International Monetary Fund (IMF) deputy managing director and former People’s Bank of China (PBoC) deputy governor : Bo Li said of CBDC programmability “ . For example, welfare payment; for example, consumption coupons; for example, food stamps.” CBDC can allow government agencies and private sector players to program — to create smart contracts — to allow targeted policy functions “ ,” he added. By programming CBDC, those money can be precisely targeted for what kind of people can own and what kind of use this money can be utilized “ “ Just imagine that you are able to give your kids some money in digital rubles and then restrict their use for purchase of junk food Alexey Zabotkin, Cyber Polygon, July 2021 https://www.youtube.com/watch?v=7E00PocVkys&embedable=true In July 2021, gave a real world example of what CBDC programmability could look like when he spoke at the annual cybersecurity training exercise . Bank of Russia deputy governor Alexey Zabotkin Cyber Polygon There, Zabotkin explained: “ . This [digital ruble] will permit better traceability of payments and money flow, and also explore the possibility of setting conditions on permitted terms of use of a given unit of currency “ , for example. Just imagine that you are able to give your kids some money in digital rubles and then restrict their use for purchase of junk food “ .” That would be a useful functionality for a customer, and of course you can come up with hundreds of other similar use cases We are getting more and more glimpses into those “hundreds of other similar use cases” as we look to proposals from countries like Thailand with its geolocation restrictions and expiry dates, as well as with its caps on savings and spending. Nigeria This article was originally published by on Tim Hinchliffe The Sociable.

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