## Programmability in Payment and Settlement

_IMF Working Papers, August 16, 2024_

## Source details

**Canonical URL:** [Programmability in Payment and Settlement](https://www.imf.org/en/publications/wp/issues/2024/08/15/programmability-in-payment-and-settlement-553493)

## Other formats

- [Markdown version](/en/publications/wp/issues/2024/08/15/programmability-in-payment-and-settlement-553493/index.md)
- [Structured JSON version](/en/publications/wp/issues/2024/08/15/programmability-in-payment-and-settlement-553493/index.json)
- [Bundle manifest](/en/publications/wp/issues/2024/08/15/programmability-in-payment-and-settlement-553493/bundle-manifest.json)

## Bibliographic details
- Authors: Xavier Lavayssière, Nicolas Zhang
- Published: August 16, 2024
- Series: IMF Working Papers
- DOI: https://doi.org/10.5089/9798400286452.001

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### Overview and central thesis
- Programmability in payment and settlement has yet to realize its potential to support policy goals such as efficiency, safety, and innovation.
- The paper proposes a comprehensive framework for understanding and evaluating programmability.
- It bridges policy discussions with technical considerations by describing programmatic models to inform and guide the development of digital finance.

### Framework: two key dimensions
- External programmatic access: the ability for external participants to access the system data and functions with code.
- Internal programmatic capabilities: the extent to which internal execution of programs is supported and guaranteed.
- Strategies are developed based on these dimensions to guide system design and policy choices.

### Benefits and objectives
- By developing strategies based on the two dimensions, financial institutions, regulators, and related actors can:
  - improve resilience
  - reduce costs
  - improve interoperability
  - manage associated risks

### System design approach and models
- The resulting hybrid systems are coordinated efforts balancing:
  - advantages of permissionless blockchains, such as composability
  - regulatory requirements
  - a wider range of technologies
- The paper describes these programmatic models to inform and guide the development of digital finance.

### Policy implications and recommendations (as presented)
- Develop strategies grounded in the two key dimensions (external programmatic access; internal programmatic capabilities).
- Enable financial institutions, regulators, and related actors to use those strategies to:
  - enhance resilience
  - lower costs
  - increase interoperability
  - manage risks associated with programmability
- Pursue hybrid system designs that balance composability benefits from permissionless blockchains with regulatory requirements and technological diversity.

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## Content in this bundle

- **Working Paper**
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  - [Working Paper (PDF)](/-/media/files/publications/wp/2024/english/wpiea2024177-print-pdf.pdf){rel="external" type="application/pdf"}

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_Source: https://www.imf.org/en/publications/wp/issues/2024/08/15/programmability-in-payment-and-settlement-553493_