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.

Virtual Currency Law: The Emerging Legal and Regulatory Framework by V. Gerard Comizio is one of the first casebooks to explore the emerging legal and regulatory framework governing virtual currency activities under a wide range of federal and state laws, including securities, banking, commodities, money transmission, payments systems, commercial, anti-money laundering, fintech, cyber and data security, tax, Constitutional and international laws. Virtual Currency Lawis one of the first books specifically suited for use in a law school course exploring the emerging legal and regulatory framework governing virtual currency activities. Since the advent of the first virtual currency (Bitcoin) in 2008, a new global financial ecosystem has emerged, composed of an increasing number and variety of digital assets. In this context, the book explores how governments, regulators and legal experts are increasingly looking to existing securities, banking, commodities, money transmission, payment systems, commercial, anti-money laundering, fintech, cyber and data security, tax, Constitutional and international laws to address the unique, novel, and complex issues presented by virtual currency. The book also explores how the ubiquitous nature of virtual currency has led to it being viewed as the legal and regulatory equivalent of a wide range of traditional corporate and financial services products, services, activities, and investments. Highlights of the First Edition: One of the first legal textbooks to address the wide range of emerging virtual currency law and regulation Chapter by chapter coverage of major areas of emerging corporate and financial institutions law and regulation governing virtual currency-related products, services, investments, and activities Cutting edge materials on emerging Constitutional law issues Professors and students will benefit from: Each chapter generally begins with a basic introduction to the fundamental legal and regulatory legal framework of the respective areas of law being applied to virtual currency. As such, for students, it is not only a useful primer on virtual currency regulation, but also provides a basic understanding of major areas of corporate and financial institutions laws. for professors who are not experts in all areas of law and regulation covered in the book, these chapter introductions will help provide a better understanding of the materials. The chapters, organized by the area of law and regulation analyzed, also provide useful comparative analysis of similar concepts under other laws and regulations discussed in other chapters. To provide a broader context and understanding of the materials presented, the book also covers current developments in policy areas related to virtual currency, including developments in government-backed virtual currencies, emerging quantum computer cyber threats to the blockchain and emerging free speech issues regarding social media restraints on virtual currency activities.

This paper marks the launch of a new IMF series, Fintech Notes. Building on years of IMF staff work, it will explore pressing topics in the digital economy and be issued periodically. The series will carry work by IMF staff and will seek to provide insight into the intersection of technology and the global economy. The Rise of Digital Money analyses how technology companies are stepping up competition to large banks and credit card companies. Digital forms of money are increasingly in the wallets of consumers as well as in the minds of policymakers. Cash and bank deposits are battling with so-called e-money, electronically stored monetary value denominated in, and pegged to, a currency like the euro or the dollar. This paper identifies the benefits and risks and highlights regulatory issues that are likely to emerge with a broader adoption of stablecoins. The paper also highlights the risks associated with e-money: potential creation of new monopolies; threats to weaker currencies; concerns about consumer protection and financial stability; and the risk of fostering illegal activities, among others.