Smart Money: Blockchain-based Customizable Payments System

Michel Avital, Jonas Hedman, Lars Albinsson

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Legal tender in the form of coins and banknotes is expected to be replaced at one point in the future by digital legal tender. This transformation is an opportunity for central banks to rethink the idea of money and overhaul the prevailing payment systems. Digital legal tender is expected to reduce transaction costs by providing seamless real-time payments. In addition, digital legal tender that is based on blockchain technology can provide a foundation for customizable “smart money” which can be used to manage the appropriation of money and its use. In essence, the smart money is a customizable value exchange instrument that relies on computer protocols to facilitate, verify, and enforce certain conditions for its appropriation as payment, e.g. who may use the money, where, and for what. If we believe that digital legal tender will become ubiquitous, then the emergence and diffusion of smart money is inevitable and deserves further investigation.
Original languageEnglish
JournalDagstuhl Reports
Issue number3
Pages (from-to)104-106
Publication statusPublished - 2017


  • Money
  • Legal tender
  • Digital money
  • Customizable money
  • Payment system
  • Blockchain
  • Distributed ledger technology

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