Last week, Katie Fortune, senior manager of the central bank digital currency (CBDC) unit at the Bank of England (BofE), suggested that the digital pound will not include government-enabled programmability functions to avoid misperceptions about government overreach. Ms. Fortune was speaking at Citibank’s 10th Annual Digital Money Symposium.
The issue of programmability is a sensitive one in CBDC discussions. The usual argument is that because any government-issued digital currency would be a de facto legal tender – therefore, anyone would have to accept it – CBDCs should be simple, standardized, and not restricted. However, programmability functions could limit usability and impose rules on how people are allowed to spend their money. The BofE believes that if these functions were introduced by design, they could feed people’s misperceptions and reduce trust in the system.
“What we can’t have with public money is some sense that I might decide you are not allowed to spend that on what you want to spend it on, because the government doesn’t approve of what you’re doing,” said Ms. Fortune.
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