Monetary Sovereignty in the Digital Era

46 Pages Posted: 4 May 2023 Last revised: 30 Oct 2023

See all articles by Edoardo D. Martino

Edoardo D. Martino

University of Amsterdam; European Banking Institute

Multiple version iconThere are 2 versions of this paper

Date Written: May 4, 2023


The relationship between private and public money has shaped the economic and legal debate over money for centuries. Private money can either compete with or complement public money and this depends on the applicable law and the relative powers of the State and private parties. The rise of disruptive digital and cryptographic technologies applied to money creation has the potential to innovate this century-long debate.

This article proposes a framework to analyse the role of the law in the relation to the risks and benefits of having circulating private money competing with public money. Accordingly, the article highlights the unprecedented threat to monetary sovereignty, the risks to systemic stability and, ultimately, to democratic decision-making prompted by digital private money.

To counter these risks while seizing potential efficiency gains generated by novel forms of private money, the article proposes to regulate convertibility and fragment by regulation such a potentially global market.

Keywords: Monetary sovereignty, monetary competition, private money, stablecoins, optimal digital currency area

JEL Classification: E42; E44; G24

Suggested Citation

Martino, Edoardo D., Monetary Sovereignty in the Digital Era (May 4, 2023). European Banking Institute Working Paper Series 2023 - no. 141, Amsterdam Law School Research Paper No. 2023-18, Amsterdam Center for Law & Economics Working Paper No. 2023-07, Available at SSRN: or

Edoardo D. Martino (Contact Author)

University of Amsterdam ( email )

Roetersstraat 11
NE 1018 WB
Amsterdam, 1018 WB

European Banking Institute ( email )


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