Central Banks Challenge Monetary Law By Issuing Digital Currencies

Central Banks Challenge Monetary Law By Issuing Digital Currencies

european central bank

Are central banks legally allowed to issue digital currencies? In an attempt to answer this question, the legal department of the International Monetary Fund (IMF) has published a document in which it makes a complete review of existing financial legal provisions. In this sense, it concludes that a reform of the laws is necessary so that the digital currencies of the central bank (CBDC) can acquire the status of legal course.

In the report, IMF advisers pointed out that cbdc issuance should be based on a sound legal basis that is consistent with central bank law. Although in many cases this law only authorizes the issuance of coins in paper or plastic. Nothing is legally backed in digital format, which represents a challenge.

However, the document proposes a form: "in any case, this lack of legal basis can be corrected by changes to the law of the central bank". However, he clarifies that even if the CBDC issue has a solid legal basis under central bank law, its status under monetary law will continue to "raise many complex issues." Especially since digital currencies do not represent a new currency and can only be considered as a form of payment expressed in currencies, according to the report.

Read the full story at: explica.co.


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