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

52 Pages Posted: 5 Jan 2021

See all articles by Wouter Bossu

Wouter Bossu

International Monetary Fund (IMF)

Masaru Itatani

International Monetary Fund (IMF)

Catalina Margulis

International Monetary Fund (IMF)

Arthur Rossi

International Monetary Fund (IMF)

Hans Weenink

International Monetary Fund (IMF)

Akihiro Yoshinaga

International Monetary Fund (IMF)

Date Written: November 2020

Abstract

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.

JEL Classification: E42, E52, E58, F24, F33, O24, O33, H20

Suggested Citation

Bossu, Wouter and Itatani, Masaru and Margulis, Catalina and Rossi, Arthur and Weenink, Hans and Yoshinaga, Akihiro, Legal Aspects of Central Bank Digital Currency: Central Bank and Monetary Law Considerations (November 2020). IMF Working Paper No. 20/254, Available at SSRN: https://ssrn.com/abstract=3758088

Wouter Bossu (Contact Author)

International Monetary Fund (IMF) ( email )

700 19th Street, N.W.
Washington, DC 20431
United States

Masaru Itatani

International Monetary Fund (IMF) ( email )

700 19th Street, N.W.
Washington, DC 20431
United States

Catalina Margulis

International Monetary Fund (IMF) ( email )

700 19th Street, N.W.
Washington, DC 20431
United States

Arthur Rossi

International Monetary Fund (IMF) ( email )

700 19th Street, N.W.
Washington, DC 20431
United States

Hans Weenink

International Monetary Fund (IMF) ( email )

700 19th Street, N.W.
Washington, DC 20431
United States

Akihiro Yoshinaga

International Monetary Fund (IMF) ( email )

700 19th Street, N.W.
Washington, DC 20431
United States

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