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Legal Framework for Central Bank Digital Currencies and the Digital Ruble

Author

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  • Larisa V. Sannikova

    (State Academic University for the Humanities, Moscow, Russian Federation)

Abstract

The introduction of central bank digital currencies (CBDCs) requires an appropriate legal framework. Its absence creates serious legal and reputational risks that may undermine citizens' confidence in the new digital form of national currency. The purpose of this article is to explore the approaches to the formation of the legal basis for the functioning of CBDCs based on the analysis of foreign experience and Russian legislation. The article highlights the legal features of CBDCs that allow to distinguish them from other state digital financial instruments. The author proposes a legal taxonomy of retail CBDCs, revealing the legal consequences of the choice of CBDC design. Special attention is paid to the problem of legal balance between user privacy and security. The article investigates legal approaches to the regulation of CBDC of foreign countries, primarily China. The author analyses the legislation on the digital ruble, which showed the insufficiency of legal guarantees to protect the rights of citizens — users of the digital ruble platform, which may negatively affect public confidence in the digital ruble.

Suggested Citation

  • Larisa V. Sannikova, 2023. "Legal Framework for Central Bank Digital Currencies and the Digital Ruble," Finansovyj žhurnal — Financial Journal, Financial Research Institute, Moscow 125375, Russia, issue 5, pages 27-44, October.
    • Handle: RePEc:fru:finjrn:230502:p:27-44
    DOI: 10.31107/2075-1990-2023-5-27-44
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    References listed on IDEAS

    as
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    4. Todd Keister & Daniel Sanches, 2023. "Should Central Banks Issue Digital Currency?," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 90(1), pages 404-431.
    5. Ozili, Peterson K, 2022. "Circular economy and central bank digital currency," MPRA Paper 113469, University Library of Munich, Germany.
    6. Raphael Auer & Rainer Boehme, 2020. "The technology of retail central bank digital currency," BIS Quarterly Review, Bank for International Settlements, March.
    7. Ms. Inutu Lukonga, 2023. "Monetary Policy Implications of Central Bank Digital Currencies: Perspectives on Jurisdictions with Conventional and Islamic Banking Systems," IMF Working Papers 2023/060, International Monetary Fund.
    8. Mr. Tommaso Mancini-Griffoli & Maria Soledad Martinez Peria & Mr. Itai Agur & Mr. Anil Ari & Mr. John Kiff & Ms. Adina Popescu & Ms. Celine Rochon, 2018. "Casting Light on Central Bank Digital Currencies," IMF Staff Discussion Notes 2018/008, International Monetary Fund.
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    More about this item

    Keywords

    central bank digital currency (CBDC); legal taxonomy; retail CBDCs; programmable CBDCs; digital ruble; digital yuan;
    All these keywords.

    JEL classification:

    • G21 - Financial Economics - - Financial Institutions and Services - - - Banks; Other Depository Institutions; Micro Finance Institutions; Mortgages
    • G28 - Financial Economics - - Financial Institutions and Services - - - Government Policy and Regulation

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