Programmable bank accounts: unlocking the future of finance with smart contracts

Written by Adam Feiler, Head of Partnerships @minima.global

The evolution of digital money is no longer just about making payments faster or cheaper - it’s about unlocking entirely new forms of financial interaction. One of the most significant innovations in this space is the programmable bank account, a concept that combines the flexibility of smart contracts with the reliability of established banking infrastructure. Programmable bank accounts move beyond simple transactions, embedding pre-agreed conditions directly into the payment process. This enables automatic execution of fund releases, approvals, and multi-party verification without requiring manual intervention. As businesses and individuals increasingly demand more control, transparency, and automation in their financial interactions, programmable bank accounts emerge as a practical bridge between traditional finance (TradFi) and the digital economies enabled by AI, Web3 and machine-to-machine interactions.

What makes a bank account programmable?

At its core, a programmable bank account enables users to encode rules directly into financial transactions, defining how and when funds can move. These rules can be simple - like releasing funds upon delivery confirmation - or highly complex, involving multiple parties, tiered approvals, or real-time data feeds from external systems. Key programmable features include:

· pre-authorised payments - funds are allocated in advance but only released once predefined conditions are met.

· funds locking and escrow - specific portions of an account balance can be reserved until certain conditions or milestones are satisfied.

· multi-signature approvals - payments can require sign-off from multiple stakeholders, adding governance and oversight for higher-risk transactions.

This framework enhances trust, automation and transparency which is especially valuable in sectors such as cross-border trade, supply chain finance and high-value transactions where traditional processes are slow, expensive and prone to error.

The role of smart contracts in programmable bank accounts

The real enabler of programmable bank accounts is the smart contract functionality provided by blockchain platforms such as Minima. Smart contracts act as self-executing agreements, ensuring payments happen only when predefined conditions are objectively met. Importantly, these smart contracts are verified and validated and executed on a blockchain network independently from the core banking system, meaning businesses and individuals can build sophisticated payment workflows without altering or compromising the regulated banking infrastructure. This programmable logic is generated and stored in a tamper-proof, transparent and accessible way across all participating nodes. Because Minima runs directly on users’ devices, the smart contract logic remains under the control of the account holder, while the regulated banking layer focuses solely on custody, payments and compliance. This separation of responsibilities - smart contracts defining the logic, while the bank handles custody and settlement -ensures that programmable bank accounts align with existing regulatory frameworks while delivering new levels of automation and flexibility.

How smart contracts drive programmable payments

In practice, smart contracts can be programmed to generate highly deterministic payment requests, which are sent via API to the banking system once the pre-agreed conditions are fulfilled. Each conditional element - whether verifying a digital signature, confirming delivery data or ensuring time-based triggers have passed - performs a narrowly defined action. This makes it impossible for the underlying mandate instructions to be manipulated or repurposed. By combining these basic building blocks into more complex conditional sequences, users can automate entire payment workflows. Some simple cases - such as account-on-file transactions, where a merchant stores a customer’s payment details - may only require pre-authorisation logic. Others - like escrowed payments tied to delivery verification - may use pre-authorisation, funds locking and multi-signature approvals together. This allows for a high degree of innovation outside the banking core, while still ensuring each blockchain-powered instruction remains automated, transparent, and deterministic. This type of automated, conditional payment functionality becomes a value-added service - one that reduces operational costs, increases settlement speed and eliminates friction points in complex transactions.

Programmable money in action

The applications for programmable bank accounts are vast. Some key examples include:

· supply chain automation - payments automatically released when goods clear customs, confirmed by real-time tracking data.

· subscription management - smart contracts dynamically adjust subscription fees based on usage, with automatic approvals and refund triggers.

· machine-to-machine payments - autonomous vehicles paying for charging stations or tolls in real time, without human oversight.

· cross-border trade settlements - delivery-versus-payment transactions where smart contracts encode both parties’ obligations, ensuring funds only move when both sides meet their commitments.

These innovations are not just about convenience - they reduce operational risk, enhance auditability and create new value streams by embedding programmable financial logic directly into each transaction.

Balancing innovation and compliance

While programmability opens new doors, it also raises important questions about contract security, legal clarity and user understanding. By keeping programmable logic separate from regulated banking processes, this model ensures that core banking operations remain compliant while programmable features can evolve and innovate more flexibly. There can be a clear division of roles, a regulated firm is responsible for user onboarding and ongoing FIAT transaction monitoring while a tech provider such as Minima ensures programmable logic is secure and censorship-resistant and finally a bank executes the payments. Thus, ensuring that innovation and compliance evolve together, rather than in conflict.

Why programmable bank accounts matter now

The programmable bank account isn’t just theoretical; it’s a practical step toward fully programmable digital money, a concept already under exploration by regulators and central banks globally. In the UK, Bank of England Governor, Andrew Bailey, has publicly highlighted the potential for digital technology to automate payment flows based on objective conditions, such as automatic release of funds when goods are delivered. By demonstrating how programmable accounts work within existing banking infrastructure, it is possible to observe how programmable money can function at scale - with clear controls, auditability and transparency built in. While the benefits for businesses and institutions are clear, programmable bank accounts also create opportunities for greater financial autonomy at the individual level. With smart contract functionality built into easy-to-use apps, users retain the freedom to define how, when, how much and where their money moves, in alignment with their own values and preferences. This self-sovereignty, combined with the stability and security of regulated banking infrastructure, offers a best-of-both-worlds approach: financial automation that is both compliant and retains personal control. Alastair Constance, CEO of Mercury, states: “Businesses increasingly expect their financial services to be as automated and customizable as their digital operations. By combining smart contract capabilities with regulated banking infrastructure, we unlock entirely new ways to manage, secure, and authorize payments - removing unnecessary friction while maintaining trust and compliance in a scalable and cost-efficient manner." The US-based, Stripe, is enabling programmable payments to be a reality. It has been investing in AI for a while and now with the recent acquisitions of Bridge sees stablecoins as the next growth area. Processing $1.4 trillion in payments in 2024, the company now handles an impressive 1.3% of global GDP. Global companies such as NVIDIA and PepsiCo use Stripe to refine their payment processes, leveraging AI to unlock efficiency and new revenue opportunities. Companies using Stripe’s AI-powered demonstrating that automation and intelligence in financial transactions are no longer optional, but essential.

Programmable bank accounts represent a natural evolution in the world of payments. They enable businesses and individuals to embed smart logic into every transaction, reducing uncertainty, increasing efficiency and enhancing financial control. By abstracting programmable logic into a decentralised smart contract layer, so allow innovation to flourish - without compromising the trust, regulatory compliance or security of the traditional banking system. This is not just an enhancement to bank accounts. It’s a redefinition of how money can be programmed to act on behalf of its owners - paving the way for programmable digital money, automated financial ecosystems and true digital financial sovereignty.