Legal Aspects of Central Bank Digital Currency: Central Bank and Monetary Law Considerations

By Wouter Bossu, Masaru Itatani, Catalina Margulis, Arthur D. P. Rossi, Hans Weenink, Akihiro Yoshinaga

November 20, 2020

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Wouter Bossu, Masaru Itatani, Catalina Margulis, Arthur D. P. Rossi, Hans Weenink, and Akihiro Yoshinaga. Legal Aspects of Central Bank Digital Currency: Central Bank and Monetary Law Considerations, (USA: International Monetary Fund, 2020) accessed November 21, 2024

Disclaimer: IMF Working Papers describe research in progress by the author(s) and are published to elicit comments and to encourage debate. The views expressed in IMF Working Papers are those of the author(s) and do not necessarily represent the views of the IMF, its Executive Board, or IMF management.

Summary

This paper analyzes the legal foundations of central bank digital currency (CBDC) under central bank and monetary law. Absent strong legal foundations, the issuance of CBDC poses legal, financial and reputational risks for central banks. While the appropriate design of the legal framework will up to a degree depend on the design features of the CBDC, some general conclusions can be made. First, most central bank laws do not currently authorize the issuance of CBDC to the general public. Second, from a monetary law perspective, it is not evident that “currency” status can be attributed to CBDC. While the central bank law issue can be solved through rather straithforward law reform, the monetary law issue poses fundmental legal policy challenges.

Subject: Central Bank digital currencies, Central bank legislation, Central banks, Currencies, Financial markets, Legal support in revenue administration, Money, Payment systems, Revenue administration, Technology

Keywords: Blockchain, Book money, CBDC, Central Bank digital currencies, Central Bank Digital Currency, Central bank law, Central bank legislation, Crypto assets, Cryptocurrency, Currencies, Digital currency, Law reform, Legal support in revenue administration, Monetary unit, Payment systems, Token-based CBDC, WP

Publication Details

Pages:

51
Volume:

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DOI:

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Issue:

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Series:

Working Paper No. 2020/254
Stock No:

WPIEA2020254
ISBN:

9781513561622
ISSN:

1018-5941

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