Programmable central bank digital currency for monetary circuits of production

Central bank digital currency (CBDC) is now a certainty. While Ecuador's CBDC was the first of the modern era, China's DC/EP deployment was the first of a major economy. Most analyses on CBDCs have focused on the payment system dynamics and the financial stability impacts on the commercial banking system. I extend circuit-theory based approaches with respect to the monetary theory of production and explore the characteristics that CBDCs should have with an activist central bank in mind, especially one low in the international hierarchy of money and one sympathetic to development concerns of its country. The embedded characteristics together with the digital currency itself are contemporarily called "programmable money". A successful CBDC that can guarantee real-time gross settlement, by definition, should rest on a unique ledger. While digital currencies with self-executable smart contracts may sound exotic, it helps to frame the discussion in terms of better-known quasi-monetary instruments: mobile-phone airtime, airline miles or food stamps. I present a viable accounting innovation for fungibility between bank money and central bank money: the contingent liability on the CBDC ledger.