Training Course: Legal Aspects of Central Bank Digital Currency: Central Bank and Monetary Law Considerations

Introduction

This training program analyzes the legal foundations of central bank digital currency (CBDC) under the 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 straightforward law reform, the monetary law issue poses fundamental legal policy challenges.

This training course will highlight:

• The current policy goals and challenges of CBDC.

• The Concept, Design Features, and Legal Implications

• The Legal Risks Associated with CBDCs and cross-border payments

• The Regulations around the World for CBDCs

• Advantages, challenges, and risks of CBDC

• Central banks laws and monetary law reforms

Target Audience

• Central Bank Officials involved in the development, regulation, and implementation of Central Bank Digital Currency (CBDC) projects.
• Policymakers and Regulators responsible for shaping monetary policy frameworks and legal regulations related to CBDCs.
• Legal Professionals specializing in banking law, monetary law, and financial regulations related to digital currencies.
• Financial Sector Professionals working in banks and financial institutions undergoing digital transformation and payment system modernization.
• Technology and Fintech Professionals involved in digital infrastructure, payment systems, and financial technology solutions.
• Risk and Compliance Professionals responsible for assessing legal, regulatory, operational, and financial risks in CBDC environments.
• Researchers and Academics studying the economic, legal, and financial impact of CBDCs on monetary systems.
• Industry Consultants and Advisors supporting governments and financial institutions in CBDC strategy and implementation.

Objectives

By the end of this training course, you will be able to:

• Understand the working principle of CBDCs, and their advantages and disadvantages.

• Know the policy goals and challenges of CBDC projects.

• The legal implications of CBDCs and their features and concepts.

• Determine the Legal Risks Associated with CBDCs, as a property decentralizes status and its risks.

• Know the different regulations from central banks around the world.

• Determine the need for Central bank law reform and monetary law reform to organize the CBDCs.

Training Outlines

Day 1: Introduction to CBDCs & Core Concepts

• Introduction to Central Bank Digital Currencies (CBDCs)
• How CBDCs work: mechanisms and operational structure
• Types of CBDCs: wholesale vs retail
• Advantages and disadvantages of CBDCs
• Comparison between CBDCs and cryptocurrencies
• Global examples of CBDC implementations

Day 2: Policy Objectives of CBDCs

• Key policy goals of CBDC projects
• Financial inclusion and expanded access to payment systems
• Improving payment efficiency and reducing transaction costs
• Strengthening resilience of payment systems
• Reducing illicit financial activities
• Enhancing monetary sovereignty
• Competition and market structure implications

Day 3: CBDC Challenges & Policy Trade-offs

• Key challenges in CBDC design and implementation
• Policy trade-offs between privacy, efficiency, and control
• Risks related to adoption and public trust
• Operational and technological constraints
• Summary of CBDC policy objectives and limitations

Day 4: CBDC Design, Legal Concepts & Risk Frameworks

• CBDC concept, architecture, and design features
• Legal classification of CBDCs (monetary instrument vs property)
• Centralization vs decentralization considerations
• Key motivations, challenges, and risks
• Cross-border payment implications
• Monetary policy and financial stability considerations

Day 5: Financial Stability & Systemic Risks

• Impact of CBDCs on banking systems and financial intermediation
• Risks to deposits, liquidity, and credit creation
• Potential effects on bank runs and financial crises
• Implications for payment system stability
• Balancing innovation with financial stability

Day 6: Legal Foundations of CBDCs

• Legal status of CBDCs under monetary law
• Central bank mandates and legal authority
• CBDCs as legal tender and regulatory implications
• Interaction with existing financial and monetary laws
• Need for legal reform to support CBDC implementation

Day 7: Privacy, Data Protection & Digital Rights

• CBDCs and privacy challenges
• Data protection frameworks and regulatory compliance
• CBDC architecture: privacy vs transparency balance
• Consumer data rights and security considerations
• Policy approaches to safeguarding user privacy

Day 8: Digital Euro Case Study

• Overview of the Digital Euro project
• ECB timeline and development stages
• Legal basis and regulatory considerations
• Legal tender status within the Eurozone
• Privacy and data protection design choices
• Impact on the European financial system

Day 9: Global CBDC Regulatory Landscape

• CBDC initiatives by major central banks:
  • Bank of Canada
  • Bank of Japan
  • European Central Bank
  • Sveriges Riksbank
  • Swiss National Bank
  • Bank of England
  • Federal Reserve System
  • Bank for International Settlements
• Comparative analysis of global CBDC approaches

Day 10: Central Bank Law & Monetary Law Reform

• Introduction to Central Bank Law and relevance to CBDCs
• Token-based vs account-based CBDC legal implications
• Common legal issues across CBDC models
• Monetary law and its application to CBDCs
• Need for legal and regulatory reforms in the digital era
• Final review of key concepts and future directions