Principles of monetary law: Classical vs modern approach

Abstract

The subject matter of analysis in this paper is the importance, value and reach of the principles of monetary law which are observed through the prism of their original field of application and social justification in the period of early development, and the subsequent establishment of this positive law branch in the legal order, which indisputably determined the axiology and confirmed the validity of the academic and practical study of this scientific discipline. The paper further examines the theses on the (un)sustainability of the original principles (lex monetae) in the circumstances of accession to the monetary union, as well as today's monetary flows that increasingly rely on the use of digital technologies and the advantages of monetary innovations. It inevitably raises the question of redefining the form, the content and reach of the principle of lex monetae to maintain monetary stability as a public good, but also to preserve monetary sovereignty protected by the central bank as the supreme monetary institution. In the process of implementing the principles of monetary law, in the circumstances of the information revolution, the legislator may face not only the challenges related to the impact of decentralized financial technologies on the protection of the rights of monetary users and public monetary management but also the challenges related to monetary innovations carried out by the central bank itself as the bearer of monetary sovereignty. In the author's opinion, central bank digital money represents an ingenious solution, a compromise that will simultaneously allow the central bank to preserve its position as the guardian of monetary sovereignty while at the same time legalizing the use of private digital money that is already accepted in some monetary jurisdictions as a legal tender. A big challenge in preserving the principle of lex monetae is the idea of a kind of incorporation of software code into a legal norm, which is a complex multidisciplinary issue that lawyers cannot resolve alone but in close cooperation with other experts in the economic and technical professions. At the same time, this process must take the form of a specific and legally rounded international initiative because only by the simultaneous application of primary monetary legislation (which has been regulating lex monetae in an identical way for decades) and secondary monetary legislation (which deals with the issue of its digitization) at all levels of state management can ensure monetary stability as a global public good. In the absence of coordinated international cooperation between central banks and other subjects of international monetary law, monetary instability would easily spill to another monetary jurisdiction.

Keywords

• monetary law
• monetary jurisdiction
• monetary credibility
• lex monetae