'Legal tender' and Central Bank Digital Currency

Currency can be studied and analysed in various ways. The most common are economic and historical, on the one hand, and legal, on the other. Rarely have scholars ventured into a multidisciplinary investigation outlining the interactions that law has on the economic theory of money or that economics has on its legal nature. In the physical world, the currency is a token linked to a value guaranteed by its collateralisation to a rare commodity (for example, gold) or the regulatory system devised by the political-constitutional setup. In the digital world, introducing technologies such as distributed ledger technology and blockchains allows the creation of monetary circuits outside the existing monetary law structures. We are witnessing a further evolutionary step in the relationship between law and economics in monetary matters, in which the dematerialisation of money is a function of institutional specialisation. This technology's ‘desovereignisation’ of money also brings an operational de-specialisation that undermines the foundation of fiat money as legal tender. This chapter investigates whether the potential conflict between private money (bank deposits, cryptocurrencies, and stablecoins) and public money (banknotes, coins, and central bank digital currencies) would not conceal the need for rethinking legal tender.