Alternative Digital Currencies in International Monetary Law: Global Stablecoins

Abstract

Alternative digital currencies were created to correct the shortcomings of the so-called first generation of cryptocurrencies. Their impact on the monetary order stability, systemic risk, and monetary policy strategy pursued by the central bank has been insufficiently examined, primarily because they are issued by large technology companies rather than the central bank as the custodian of monetary sovereignty. The tort law treatment of cryptocurrencies is different from monetary law standpoint and as such, it is not considered in this paper, because it is a private law relationship, while the monetary law relationship is public and includes the regulatory powers of the central bank and legal determination of (any kind) alternative money by the provisions of the central bank law as the supreme monetary institution, because the central bank has a monopoly over the legal tender for the determination of money. In that sense, we think that it would be very useful to first deal with the place and importance of alternative money in monetary law, and then with other branches of private and public law, but the acceptance and circulation of alternative money impose simultaneous (in legal terms very demanding) consideration of cryptocurrency legal nature, in which we can see the primacy of the social theory of money over state monetary nominalism). However, this primacy must be only temporary, because in the monetary history of money development in all its manifestations it is clearly shown (for the sake of legal security and preservation of monetary stability) that every appearance of money must sooner or later be regulated by adequate laws.

The accelerated technical-technological development has to some extent, in a way, "caused" the existing status quo of classical and somewhat modern monetary law thought about how money is legally defined and who can be found in the role of money issuer, which has shaken the centuries-old awareness of the nature and functions of money in modern society. Circumstances that influenced the reconsideration of already acquired habits include the emergence of reduced use of cash in circulation, the emergence of "sharing" technology that enabled the creation of cryptocurrencies, the announcement of leading technology and other multinational companies to issue private cryptocurrencies, as circumstances related to global economic and financial crisis and pandemic that point to certain advantages of alternative money.

Keywords: monetary law, lex monetae, alternative cryptocurrencies, monetary order, monetary stability.