## 1. Currency, Money and Payment Instruments: What Is in a Legal Name?

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### Introduction: context, scope, and core legal questions
- Technological developments (digital ledger, blockchain) and private virtual currencies (“stablecoins”) have prompted active consideration of central bank digital currency (“CBDC”) by central banks.
- Key framing observations:
  - CPMI: CBDC envisioned by most “to be a new form of central bank money. That is, a central bank liability, denominated in an existing unit of account, which serve both as a medium of exchange and a store of value.”
  - IMF staff SDN: CBDC is “a new form of money, issued digitally by the central bank and intended to serve as legal tender.”
  - IMF staff: “CBDC could be the next milestone in the evolution of money,” while cautioning there is “no universal case for CBDC adoption yet.”
- Central legal questions:
  - Do central banks have the authority to issue digital “currency”?
  - Can CBDC be real “currency” under monetary law?
  - Should digital currency be legal tender?
- Paper’s scope: analyze two public law aspects of CBDC: (i) legal foundations under central bank law; (ii) treatment under monetary law. Other legal areas (tax, private law, contract, settlement finality, insolvency, privacy, AML/CFT) acknowledged but not addressed except when directly relevant to monetary law.
- Purpose: ensure that, if issued, CBDC enjoys a robust legal basis; not an advocacy for issuance.

### Legal taxonomy: currency, money, payment instruments
- Definitions and legal distinctions:
  - Currency:
    - Official means of payment of a State/monetary union, recognized by monetary law.
    - Most monetary laws reserve currency status to banknotes and coins issued by the central bank (or coins issued by the State).
    - “Legal tender” status allows a debtor to discharge monetary obligations by tendering currency to the creditor.
  - Money:
    - Broader legal concept; may include assets readily convertible or redeemable into currency.
    - Includes central bank and commercial bank “book money” (credit balances on accounts).
    - Book money is not currency and enjoys legal tender status only in a few jurisdictions.
  - Payment instruments:
    - Neither currency nor money, but used to effect payment in book money or currency (e.g., cheques, bills of exchange, promissory notes).
- Note: the economic concept of money (unit of account, means of payment, store of value) does not map neatly to legal categories.

### CBDC designs and the resulting legal implications
- Four design axes with legal consequences:
  - Account-based v. Token-based
    - Account-based: digitizes balances in cash current accounts in central bank books (book money).
    - Token-based: digital token not connected to a central bank account relationship (sui generis claim in a token).
    - Legal consequence: book money in current accounts has established legal status; token-based instruments lack that legal history and require special legal provisions.
  - Wholesale v. Retail/General Purpose
    - Wholesale: CBDC issued only to existing account holders/RTGS participants.
    - Retail: CBDC offered to the general public.
    - Legal relevance: central bank laws may limit who can open current accounts; affects account-based CBDC feasibility.
  - Direct/1-tier v. Indirect/2-tier
    - Direct: central bank issues and administers CBDC directly.
    - Indirect (“synthetic”): liability issued by a commercial bank but fully backed with central bank liabilities.
    - Hybrid: direct central bank claims with intermediaries handling payments.
  - Centralized v. Decentralized
    - Permissioned DLT is highly probable; permission-less DLT could complicate central bank functions such as money supply management.
- Practical examples: very few formal CBDC issues to date (e.g., Central Bank of The Bahamas’ “Sand Dollar”, Central Bank of Lithuania’s LBCOIN). Many pilots lack sufficient legal basis.

### Core legal issues: the “CB” (issuer) and the “C” (currency)
- Two primary legal issues:
  - To qualify as a real CBDC, the “currency” needs to be a direct liability of the central bank; liabilities of commercial banks, even if backed 100% by deposits in the central bank, are not central bank liabilities.
  - For token-based CBDC, whether and under which conditions the legal framework allows “deposit” of the CBDC in commercial bank books requires analysis.
- Cash current accounts v. general ledger accounts:
  - Cash current accounts: create a sui generis contractual legal relationship (Roman law mutuum characteristics); credit balances are book money transferred by debits and credits.
  - Ledger accounts: an accounting technique that does not by itself create rights against third parties.
  - Legal consequence: token-based CBDC recorded in a central ledger is not a credit balance in a current account and thus does not create the same contractual relationship; token-based CBDC resembles banknotes in private-law relation to the issuer (subject to statutory design).

### Central bank law: authorization to issue CBDC
- Central bank laws establish/authorize central banks, their mandate, functions and powers; issuance of CBDC requires firm anchor in that law because central bank liabilities are debts.
- Relevant functions and powers:
  - Functions: currency issuance function; payment systems function.
  - Powers: power to issue certain types of currency; power to open accounts in the central bank’s books.
- Two-step authorization analysis for token-based CBDC:
  - Step 1: Does central bank law explicitly authorize issuance of currency (textual interpretation)?
  - Step 2: If not explicit, consider contextual, teleological, and historical interpretation.
- Variants in central bank law wording:
  - Some laws explicitly limit issuance to “banknotes and coins.”
  - Others use broader language authorizing issuance of “currency” without limiting form.
- Indirect provisions affecting issuance:
  - Ancillary powers (printing, circulation, withdrawal) and “asset cover” rules can implicitly restrict types of currency.
  - “Monopoly of issuance” provisions grant exclusivity to the central bank but do not necessarily limit the types of currency it may issue.
- Country practice among IMF membership (exact figures preserved):
  - Law only authorizes issuance of bank notes and coins: 104 central banks, 61%
  - Law is not clear whether it authorizes issuance of bank notes and coins or that it also authorizes the issuance of other instruments: 27 central banks, 16%
  - Open approach: issuance is not limited to banknotes and coins: 40 central banks, 23%

### Account-based CBDC and account-access authority
- Central bank powers to open cash current accounts vary:
  - Group 1: restrict opening to State, public institutions, financial institutions, or narrowly to banks.
  - Group 2: do not restrict opening to a closed group; some permit natural persons or the general public.
  - Group 3: allow restrictions to be lifted by the central bank board or minister of finance.
- What this means for account-based CBDC (authorization conclusions preserved verbatim):
  - Issuance of Account-based CBDC is authorized:
    - Laws that explicitly permit opening cash current accounts for the State and banks are authorized to offer account-based CBDC to the State and banks.
    - Where the central bank is allowed to open cash current accounts to physical persons, the central bank is, or can be, authorized to issue account-based CBDC to the general public.
    - Where the law is silent on opening current accounts, the same conclusion may apply in jurisdictions recognizing implied or incidental functions and powers (or once a critical mass of central banks have issued account-based CBDC to the general public).
  - Issuance of Account-based CBDC is not authorized:
    - Laws that grant the power to open cash current accounts only to the State, public bodies and banks, but not to physical persons, do not authorize issuing account-based CBDC to the general public.
  - Issuance of Account-based CBDC is uncertain:
    - If the law is silent on opening current accounts and the central bank does not enjoy implied or incidental powers, substantial uncertainty exists as to whether the central bank is authorized to issue account-based CBDC to the general public; it could be argued the bank is authorized to issue to its existing accountholders.
- Country practice on account-based CBDC authority:
  - 85% of central bank laws limit the power to open cash current accounts to a limited category of institutions.
  - 10 central banks corresponding to 6% of the total allow for the opening of current accounts to a broader public.
  - 9% of central bank laws include some form of provision on opening current accounts but it is not clear whether accounts can be opened to the general public.

### Payment system function: legal impact for CBDC
- Central bank laws vary in scope of payment system function:
  - Some limit to interbank payment systems only.
  - Others use broader wording covering the national payment system (institutions and infrastructures).
- Relevance for CBDC:
  - If CBDC participation remains limited to banks, existing interbank mandates generally suffice.
  - If CBDC is available to the general public, a narrow “interbank” mandate may be insufficient because the central bank would be operating a payment system with broad participation.
  - Wording that restricts the payment system function to interbank systems should be removed to accommodate public-facing CBDC designs.
- Provisions promoting technological innovation can support CBDC issuance but cannot override explicit limits on issuance or account access.

### Monetary law: official monetary unit, means of payment, legal tender, and convertibility
- Monetary law determines official monetary unit and official means of payment; five legal mechanisms to sanction means of payment are highlighted:
  - (i) monopoly of issuance by State/agent,
  - (ii) cours forcé,
  - (iii) legal tender status,
  - (iv) privileges under private law,
  - (v) protection under criminal law.
- CBDC and the monetary unit:
  - CBDC would be denominated in the existing official monetary unit and is not expected to create a new monetary unit unless legislated otherwise.
  - Token-based CBDC, if authorized, would be a central bank liability denominated in the official monetary unit, preserving convertibility at par with other central bank liabilities in principle.
- Token-based CBDC specifics:
  - Issuance by the State: if central bank law authorizes it, token-based CBDC is a valid central bank liability “on behalf of the State.”
  - Monopoly: extending issuance monopoly to digital currency is legally straightforward by expanding definitions to include “immaterial (including digital) form.”
  - Cours forcé and convertibility: token-based CBDC can be granted cours forcé status and be mutually fully convertible with banknotes as “bearer on demand” claims, absent rules to the contrary.
  - Interest: charging interest on token-based CBDC is legally questionable; token-based CBDC follows cours forcé logic and interest would break the link between face value and actual value. Account-based CBDC can legally carry interest (including negative interest) comparable to current account balances.
  - Legal tender: legislature can grant legal tender status to token-based CBDC, but doing so raises proportionality, fairness, and inclusion concerns if large population segments lack technical means; intermediate approaches (limited legal tender to specified entities) are possible.
  - Private law implications: token-based CBDC’s private-law classification is unsettled; treatment affects whether tokens can be lent or deposited, which in turn affects integration into fractional reserve banking.

### Criminal law, cybercrime frameworks, and CBDC protection
- Current criminal statutes focus on physical counterfeiting of banknotes/coins and typically do not extend to digital tokens.
- Nullum crimen, nulla poena sine lege constrains criminalization of electronic counterfeiting absent explicit laws.
- The Budapest Convention on Cybercrime (not specifically mentioning CBDC) contains substantive offences that could be applicable to attacks on CBDC systems (Articles 4–8, 10), e.g., damaging, deleting, altering computer data; computer-related forgery and fraud.
- Implications:
  - Token-based CBDC will generally not fall under traditional counterfeiting rules; dedicated statutory treatment or cybercrime law clarification is required.
  - Account-based CBDC cannot be physically counterfeited; fraud and cybercrime laws remain relevant.
  - Cybersecurity law could provide protection for central bank IT systems used to issue account-based CBDC.
- Practical legal limits: criminal law protections and private-law privileges for token-based CBDC require careful legislative and private-law analysis.

### Policy recommendations and recommended legal reforms
- Cross-cutting recommendation:
  - Countries should codify legal foundations for CBDC within central bank law reform, ideally coordinated with reviews of private law, tax law, cybercrime, and related areas.
- Recommended legal amendments for token-based CBDC:
  - i. Include an explicit function “to issue currency” generally, without limiting issuance to banknotes and coins only.
  - ii. Draft associated powers to implement this function with explicit reference to issuance of currency in the form of banknotes (and possibly coins) as well as in the form of a digital token.
  - Rationale: provides a firm legal basis for token-based features (e.g., limited privacy, general availability); no need to extend printing provisions to tokens.
- Recommended legal amendments for account-based CBDC:
  - Add a specific power to open current accounts for the general public, either directly or by authorizing the central bank’s governing body to determine categories of accountholders.
- Payment system wording:
  - Remove or broaden “interbank” restriction where present to allow public-facing CBDC designs to fall within payment system functions.
- Monetary law and criminal law reforms (for token-based CBDC):
  - Significant monetary law reform may be needed to equate token-based CBDC with banknotes (legal tender, private-law privileges).
  - Review cybercrime and criminal counterfeiting definitions to ensure explicit coverage of offences against CBDC.
- Practical conclusion:
  - Token-based and account-based CBDC are legally very different; token-based CBDC is a new form of money (a central bank liability incorporated in a digital token) and account-based CBDC is book money in digital form.
  - Few current central bank laws explicitly authorize issuance of digital-token liabilities; many laws restrict accounts for the general public. These legal gaps can be remedied through targeted central bank law amendments.

*Source: wpiea2020254-print-pdf*

### 1. Currency, Money and Payment Instruments: What Is in a Legal Name? .......................................... 8

### 1. Currency, Money and Payment Instruments: What Is in a Legal Name?

### Introduction: context and scope
- Technological developments (digital ledger, blockchain) and private virtual currencies (“stablecoins”) have prompted active consideration of central bank digital currency (“CBDC”) by central banks.
- A survey concluded: “at this stage, most central banks appear to have clarified the challenges of launching a CBDC, but they are not yet convinced that the benefits will outweigh the costs.”
- IMF staff: “CBDC could be the next milestone in the evolution of money,” while cautioning there is “no universal case for CBDC adoption yet.”
- The BIS and CPMI have issued analyses noting CBDC “raises old questions about the role of central bank money.”
- Central legal questions identified:
  - Do central banks have the authority to issue digital “currency”?
  - Can CBDC be real “currency” under monetary law?
  - Should digital currency be legal tender?
- Paper’s scope:
  - Analyze two public law aspects of CBDC: (i) legal foundations under central bank law; (ii) treatment under monetary law.
  - Other legal areas (tax, private law, contract, settlement finality, insolvency, privacy, AML/CFT) acknowledged but not addressed except when directly relevant to monetary law.
- Purpose: ensure that, if issued, CBDC enjoys a robust legal basis; not a policy advocacy for issuance.

### CBDC: definitions and legal framing
- No widely accepted definition of CBDC has emerged; CPMI and IMF staff provide guidance:
  - CPMI: CBDC envisioned by most “to be a new form of central bank money. That is, a central bank liability, denominated in an existing unit of account, which serve both as a medium of exchange and a store of value.”
  - IMF staff SDN: CBDC is “a new form of money, issued digitally by the central bank and intended to serve as legal tender.”
- Key distinctive feature: CBDC is digital.
- Question of whether CBDC qualifies as “electronic money” depends on jurisdiction:
  - Common definition of electronic money: “electronically stored monetary value represented by a claim on the issuer that is issued on receipt of funds for the purpose of making payment transactions and is accepted by natural or legal persons other than the issuer.”
  - In most jurisdictions electronic money does not enjoy legal tender status and is issued at par on receipt of funds by licensed electronic money institutions.
  - In most countries issuance of electronic money is by private institutions; in the EU issuance by central banks is excluded from the directive’s scope.

### Core legal issues: the “CB” and the “C”
- Issuance by the Central Bank (“CB”):
  - To be “real” CBDC (not “synthetic”), it should be issued as a liability of the central bank.
  - Creation of central bank liabilities is regulated by central bank laws; question: do these laws authorize issuance of “currency” in digital form?
  - Absence of clear legal authorization would undermine CBDC’s legal basis.
- Currency (“C”):
  - To qualify as currency, a means of payment must be recognized as such by monetary law.
  - Key legal consequences if CBDC is or is not treated as currency include whether CBDC can extinguish monetary obligations and whether it can enjoy legal tender status.
- These two issues are the paper’s focus.

### Legal taxonomy: currency, money, payment instruments (Box 1)
- Three legally distinct tools for making payments:
  - Currency:
    - Defined as the official means of payment of a State/monetary union, recognized by monetary law.
    - Most monetary laws reserve currency status to banknotes and coins issued by the central bank (or coins issued by the State).
    - Currency is denominated in the official monetary unit.
    - “Legal tender” status allows a debtor to discharge monetary obligations by tendering currency to the creditor.
  - Money:
    - Legal concept broader than currency; may include certain assets readily convertible or redeemable into currency.
    - Includes central bank and commercial bank “book money” (credit balances on accounts).
    - Book money is not currency and enjoys legal tender status only in a few jurisdictions.
    - Some jurisdictions classify “electronic money” as a type of money.
  - Payment instruments:
    - Neither currency nor money, but used to effect payment in book money or currency (e.g., cheques, bills of exchange, promissory notes).
- Note: economic concept of money (unit of account, means of payment, store of value) does not map neatly to legal categories.

### CBDC design features and legal implications
- Legal treatment under central bank and monetary law depends on operational/technical design features.
- As of the paper’s publication, very few central banks have officially and formally issued CBDC; examples noted (not exhaustive): Central Bank of The Bahamas’ “Sand Dollar” and Central Bank of Lithuania’s commemorative digital currency (LBCOIN). Pilot projects often lack sufficient legal basis.
- Four axes of design that bear legal consequences:
  - Account-based v. Token-based
    - Account-based: digitizes balances in cash current accounts in central bank books.
    - Token-based: digital token not connected to a central bank account relationship.
    - Legal distinction is fundamental: book money in current accounts has long-established legal status; token-based instruments lack that legal history and their public/private law status is unclear.
  - Wholesale v. Retail/General Purpose
    - Wholesale: CBDC issued only to existing account holders/RTGS participants (big banks, public bodies).
    - Retail: CBDC offered to the general public.
    - General purpose: available to both wholesale and retail users.
    - Legal relevance: central bank laws may limit who can open current accounts; distinctions matter especially if CBDC are account balances.
  - Direct/1-tier v. Indirect/2-tier
    - Direct (1-tier): central bank issues and administers CBDC circulation itself.
    - Indirect (2-tier or “synthetic”): liability issued by a commercial bank but fully backed with central bank liabilities.
    - Hybrid: direct claims on the central bank with intermediaries handling payments.
  - Centralized v. Decentralized
    - Design choice affects legal and operational responsibilities (discussed elsewhere in the paper).
- Other legal issues (e.g., AML/CFT, competition law) are important but not discussed in detail in this section.

*Source: https://www.imf.org/-/media/files/publications/wp/2020/english/wpiea2020254-print-pdf.pdf*

### 16.      From a legal perspective, two important issues arise. First, to qualify as a real CBDC,

### From a legal perspective, two important issues arise. First, to qualify as a real CBDC, the “currency” needs to be a direct liability of the central bank; this is what makes them risk free.

### Key legal issues for CBDC
- Two primary legal issues identified:
  - To qualify as a real CBDC, the “currency” needs to be a direct liability of the central bank; liabilities of commercial banks, even if backed by a 100% cash deposit in the books of the central bank, are not a central bank liability.
  - For token-based CBDC, whether, and under which conditions, the legal framework allows to “deposit” the CBDC in the books of commercial banks requires analysis.

### Centralized v. Decentralized CBDC
- Central banks are evaluating settlement architectures:
  - Centralized settlement (similar to current RTGS).
  - Decentralized settlement, especially via distributed ledger technology (DLT).
- Permissioned vs permission-less DLT:
  - A permission-less DLT could complicate central bank functions, including managing the money supply; therefore, it is highly probable central banks will opt for a permissioned DLT.
  - Legal ramifications of choosing permissioned DLT remain to be fully crystallized.
- Paper focus: one specific legal aspect of DLT; broader DLT legal issues require further work.

### Account-based vs token-based CBDC — legal implications
- Distinction has the most significant legal implications; some practical forms may be hard to distinguish.
- Identification-based taxonomy for forms of money:
  - Book money (including account-based CBDC): identity of the account holder allows access — “I am therefore I own”.
  - Physical tokens (banknotes/coins): physical possession allows disposition — “I possess therefore I own”.
  - Digital tokens: knowledge of a password/private key allows transfer — “I know therefore I own”.
- Reasons token-based CBDC can be approximated to banknotes/coins:
  - Token-based CBDC is a sui generis claim on the central bank incorporated in an immaterial token; transfer of the token equals transfer of the claim, distinguishing it from book money and bills transferred by debits and credits.
  - For token-based and physical tokens, possession (or knowledge of password) is required to make payments; loss of possession/password prevents use. For book money, loss of password does not necessarily prevent access if identity can be proven to the account maintainer.
  - Taxonomically, token-based CBDC is neither book money nor a bill; if issued to the general public, it shares circulation characteristics with banknotes and coins. Wholesale CBDC would, at least from a legal perspective, make more sense in account-based form.

### Technology and legal nature of token-based CBDC
- Use of DLT to book token-based CBDC does not, at this stage, alter the paper’s assumption that token-based and account-based CBDC are distinct forms of money.
- Key legal reason: booking token-based CBDC in a register or ledger operated by the central bank is legally not the same as booking a credit balance in a cash current account.
- Consequence: legally robust issuance of token-based CBDC requires special provisions in central bank and monetary law different from those for account-based CBDC.

### Cash current accounts v. general ledger accounts — legal distinction (Box 2)
- Cash current accounts:
  - A banking technique representing a sui generis contractual legal relationship between a financial institution and an account holder.
  - Rights and obligations primarily governed by contractual terms; in most jurisdictions operate on the Roman law mutuum contract: monies credited are “deposits” but the institution may use them by lending onward.
  - Credit balances are “book money” and transferred by debits and credits between such accounts.
- Ledger accounts:
  - An accounting technique representing a financial situation of a reporting entity based on sub-accounts in the chart of accounts.
  - Ledger accounts do not per se establish a legal relationship or create rights and obligations between the reporting entity and third parties.
- Interaction and legal consequence:
  - The total of credit balances in cash current accounts in the central bank’s books should be represented in the general ledger; sub-accounts can map per account holder.
  - Fundamental distinction remains: token-based CBDC can be represented in centrally managed ledger accounts but is not a credit balance in a current account; thus no contractual relationship exists between the central bank and the holder of token-based CBDC, except for the sui generis claim incorporated in the token, akin to the legal status of banknotes.

### Central Bank Law — definition and relevance for CBDC
- “Central bank laws” (or treaties in monetary unions) establish/authorize central banks, their decision-making bodies, autonomy foundations, and mandate.
- Key concept: mandate — actions beyond mandate are vulnerable to legal and political challenge under principles such as “attributed powers” or “specialty.”
- Issuance of CBDC requires a firm anchor in the central bank law mandate because issuance of CBDC is a novel activity and central bank liabilities are debts; issuing non-authorized debt poses legal, financial and reputational risks.
- Most central bank laws explicitly authorize issuance of the three standard liabilities: (i) banknotes and coins, (ii) book money (credit balances on current and other accounts), and usually (iii) bills.

### Assessing whether issuance of CBDC falls under central bank mandate
- Need to analyze central bank law provisions concerning:
  - Functions (what the central bank must do to achieve objectives).
  - Powers (how the central bank can act to implement functions).
- Interdependence: statutory functions often require associated legal powers; powers are exercisable in context of statutory functions.
- Relevance of particular function/power varies with CBDC design.

### Central bank functions relevant to CBDC
- Two typical functions particularly relevant:
  - Currency Issuance Function:
    - Traditional function to issue currency to the national economy.
    - Relevant for token-based CBDC: whether this function authorizes issuance of all types of currency or only banknotes and coins.
  - Payment Systems Function:
    - Traditional function to operate and oversee payment systems.
    - Relevance: any non-physical money requires a transfer system; token-based CBDC on a permissioned distributed ledger could amount to a payment system. For retail account-based CBDC, issuance could result in a payment system open to the public, raising the question whether the central bank is authorized to open access to its payment systems to the general public.

### Central bank powers relevant to CBDC
- Two typical powers are relevant:
  - Power to issue certain types of currency:
    - Many central bank laws include specific powers to issue currency and powers related to production, circulation and withdrawal of banknotes and coins. Question: do these powers extend, or should they be extended, to token-based CBDC?
  - Power to open accounts in the central bank’s books:
    - Many laws include power to open and hold cash current accounts for clients—purpose: banker to banks and State, support payment systems, implement monetary policy.
    - Because account-based CBDC is book money, issuance will only be authorized for entities for whom the central bank has the legal power to open cash current accounts.

### Central Bank Law and Token-based CBDC — authorization analysis
- Two-step approach to ascertain whether a central bank law authorizes token-based currency:
  - Step 1: Analyze whether the central bank law explicitly and directly authorizes issuance of currency through an issuance function or power; apply textual interpretation.
  - Step 2: If not explicit, consider other legislative provisions for contextual, teleological, and historical interpretation.
- Variants in central bank law wording regarding issuance:
  - First variant: function explicitly limited to banknotes and coins. Some laws use broad language (“currency”) but separately define “currency” to mean “banknotes and coins.” In many jurisdictions, plain reading limits to paper/plastic banknotes and metallic coins.
  - Second variant: wording authorizes the central bank to issue “currency” without limiting it to banknotes and coins.

*Source: wpiea2020254-print-pdf - 16.      From a legal perspective, two important issues arise. First, to qualify as a real CBDC, the “currency” needs to be a direct liability of the central bank; this is what makes them risk free.*

### 30.      The power to issue currency can also vary in central bank laws.

### 30.      The power to issue currency can also vary in central bank laws.

### Variations in legal authority to issue currency
- Some central bank laws contain no explicit power because the currency issuance function is clear enough and offers a sufficient legal basis to issue currency.
- Some central bank laws include only a power, but no function, related to the issuance of currency (often because the law does not include a list of functions).
- Some central bank laws include both a function and a power related to the issuance of currency; the legal interaction between the power and the function must be interpreted following the principle that “lex specialis derogat legi generali,” i.e., the more specific concept prevails.
- Issuance powers themselves may be:
  - General—authorizing the issuance of “currency” or “other forms of currency.”
  - Specific—authorizing only the issuance of banknotes and coins.

### Indirect provisions pertaining to the issuance of currency
- Central bank laws often include ancillary powers necessary for issuance (printing/minting, planning circulation, withdrawal, demonetization, destruction).
- Some laws require an “asset cover” for currency in circulation; historically a remnant of the gold standard. Modern variants typically require maintaining a combination of official foreign reserve assets and local government bonds in an amount equal to the currency in circulation.
- Under currency board arrangements, definitions of “monetary liabilities” can obligate a 100% backing of the defined monetary liabilities in a specific foreign currency.
- “Monopoly of issuance” provisions grant the central bank the exclusive right to issue currency within its jurisdiction and often prohibit others from issuing instruments that could be mistaken for currency; such provisions limit issuance to the central bank but do not necessarily limit the types of currency the central bank may issue.
- Some central bank laws grant broad incidental or ancillary functions and powers—explicit provisions mandating the central bank to exercise those functions or powers normally accorded to central banks or even commercial banks—allowing central banks to undertake common central bank activities without listing them specifically. These incidental powers remain limited to activities commonly undertaken by central banks and do not permit activities otherwise prohibited by the law.

### What this means for issuance of token-based CBDC
- Issuance of Token-based CBDC is authorized in the following cases (in addition to explicit authorization):
  (a) The central bank law includes a broadly worded currency issuance power enabling the central bank to issue domestic “currency,” without limiting this to banknotes and coins, and the currency issuance function is equally open or absent, or refers explicitly to other means of payment than banknotes and coins.
  (b) The central bank law does not include a currency issuance power, but a broad function to issue “currency,” without limiting this to banknotes and coins, and the law does not include specific ancillary powers or other indirect provisions that (seem to) restrict the currency issuance to banknotes and coins.
- These conclusions hold even if the law includes specific ancillary powers that only refer to printing, circulation, and withdrawal of banknotes and coins.
- Issuance of Token-based CBDC is not authorized in the following cases:
  (a) The central bank law includes a narrow function to issue “banknotes and coins” and no power to issue “currency.”
  (b) The central bank law includes a broad power to issue “currency” but a narrow function to issue “banknotes and coins” (the power must be read in light of the function).
  (c) The central bank law includes a narrow power to issue currency only in the form of “banknotes and coins.” (Banknotes refer to paper or plastic notes and coins to metallic coins; in some jurisdictions it could be argued that “banknotes” include digital banknotes, but in many countries this may be a stretched interpretation.)
  (d) The central bank law includes no, or broadly worded, issuance function or power, but includes an “asset cover” rule that directly, or indirectly through the definition of “monetary liabilities,” restricts the currency to be issued to “banknotes and coins.”
  (e) The central bank law includes no issuance function or power, and only provides for the monopoly of issuance and specific ancillary powers, and those provisions are limited to banknotes and coins; a contextual and historical interpretation may lead to the conclusion that the central bank is only authorized to issue those specifically mentioned forms.
- Issuance of Token-based CBDC is unclear when:
  - The law does not provide for an issuance function or power, or specific ancillary powers, but includes broad incidental functions or powers; or
  - The law includes a broad function to issue “currency,” without limiting this to banknotes and coins, albeit with specific ancillary powers or other indirect provisions that (seem to) restrict issuance to banknotes and coins.

### Country practice on token-based CBDC authorization
- Among the 171 central banks of the IMF membership:
  - 61% of central bank laws limit the authority of issuance of currency to banknotes and coins.
  - 23% of central bank laws allow directly for the issuance of currency in a digital format.
  - 16% of central bank laws are unclear as to whether they authorize the issuance of a digital version of central bank currencies.
- Chart data reproduced in text form:
  - Law only authorizes issuance of bank notes and coins: 104 central banks, 61%
  - Law is not clear whether it authorizes issuance of bank notes and coins or that it also authorizes the issuance of other instruments: 27 central banks, 16%
  - Open approach: issuance is not limited to banknotes and coins: 40 central banks, 23%

### Central bank law and account-based CBDC
- Many central bank laws include provisions on the power to open cash current accounts; practices differ:
  - One group restricts opening cash current accounts to a closed group (State, public institutions, financial institutions, or narrowly to banks).
  - Another group does not restrict opening accounts to a closed group; some laws impose no restrictions, others explicitly allow natural persons, and in rare cases allow the general public under certain circumstances.
  - A third category allows restrictions to be lifted by decision of the central bank’s board of directors or the minister of finance.
- In the absence of explicit authorization, implied powers doctrine (where accepted) or wording that permits incidental central bank activities may support the authority to open accounts.
- What this means for issuance of account-based CBDC:
  - Issuance of Account-based CBDC is authorized:
    - Laws that explicitly permit opening cash current accounts for the State and banks are authorized to offer account-based CBDC to the State and banks.
    - Where the central bank is allowed to open cash current accounts to physical persons, the central bank is, or can be, authorized to issue account-based CBDC to the general public.
    - Where the law is silent on opening current accounts, the same conclusion may apply in jurisdictions recognizing implied or incidental functions and powers (or once a critical mass of central banks have issued account-based CBDC to the general public).
  - Issuance of Account-based CBDC is not authorized:
    - Laws that grant the power to open cash current accounts only to the State, public bodies and banks, but not to physical persons, do not authorize issuing account-based CBDC to the general public.
  - Issuance of Account-based CBDC is uncertain:
    - If the law is silent on opening current accounts and the central bank does not enjoy implied or incidental powers, substantial uncertainty exists as to whether the central bank is authorized to issue account-based CBDC to the general public; it could be argued the bank is authorized to issue to its existing accountholders.
- Country practice on account-based CBDC authority:
  - Among the IMF membership:
    - 85% of central bank laws limit the power to open cash current accounts to a limited category of institutions.
    - 10 central banks corresponding to 6% of the total allow for the opening of current accounts to a broader public.
    - 9% of central bank laws include some form of provision on opening current accounts but it is not clear whether accounts can be opened to the general public.

*Source: IMF staff summary of central bank law provisions in the referenced chapter.*

### 46.      What is the legal impact of the payment system function?

### 46.      What is the legal impact of the payment system function?

### Central bank payment system function: scope and variation
- Central bank laws differ in how they establish the payment system function:
  - Many central bank laws limit this function to payment systems in the strict sense, i.e., a specific payment infrastructure.
  - A subset of those laws limits the payment system further to “interbank” payment systems only.
  - Other central bank laws use broader wording and charge the central bank with overseeing and promoting the soundness of “the (national) payment system,” a broader concept encompassing institutions (banks, payment institutions) and infrastructures (payment and securities settlement systems, central securities depositories, central counterparties, clearing houses) used to transfer monetary value within an economy.

### Relevance for CBDC
- Current central bank-operated payment systems are almost all interbank payment systems with participation limited to banks—and often only sizeable banks.
- The establishment of token-based or account-based CBDC will create technical, operational and legal infrastructure that transfers monetary value between users; such infrastructure can arguably be considered a “payment system.”
- Legal implications:
  - If CBDC participation remains limited to banks (and similar financial institutions), existing interbank mandates generally suffice.
  - If CBDC is made available to the general public, the central bank could be considered to operate a payment system with almost the entire population as participants.
  - For central banks with broadly worded payment system functions, public availability of CBDC should not raise major legal issues.
  - For central banks whose mandate is restricted to interbank payment systems, the mandate may be too narrow because “interbank” denotes execution of payments between banks, not between broader categories of users or the general public.
- A comparable issue arises for oversight powers that may entail establishment of legal infrastructure for payment transfers via interbank payment systems.

### Provisions promoting technological innovation
- A few central bank laws include specific wording that the central bank has a function to promote technological innovation in the banking system; sometimes this is explicitly linked with the payment system function.
- Such provisions can be relevant to CBDC and, where the legal basis is otherwise weak, can serve as an additional argument supporting issuance of CBDC.
- However, these innovation-promoting provisions cannot overrule specific limitations in powers to issue currency or offer current accounts to the general public.

### The need for central bank law reform
- The absence of an explicit and robust legal basis for issuance of token-and/or account-based CBDC can be relatively easily remedied through targeted central bank law reform. (ANNEX I contains draft provisions to this effect.)
- Other legal issues (for instance private law) may also need to be addressed in the same context and could complicate the exercise.

### Token-based CBDC: recommended legal amendments
- To provide a firm legal basis for issuance of token-based CBDC, central bank laws might need the following amendments:
  - i. Include an explicit function “to issue currency” generally, without limiting the issuance of currency to banknotes and coins only.
  - ii. Draft the associated powers to implement this function with an explicit reference to issuance of currency in the form of banknotes (and possibly coins) as well as in the form of a digital token.
- Rationale: such explicit legal basis would support more innovative CBDC features (e.g., limited privacy and general availability).
- Note: there is no need to extend provisions on the printing of banknotes to token-based CBDC.

### Account-based CBDC: recommended legal amendments
- To provide a firm legal basis for issuance of account-based CBDC to the general public, central bank laws should be amended to add a specific power to open current accounts for the general public.
  - This can be done directly—by mentioning the general public in the central bank law—or indirectly by allowing the competent decision-making body of the central bank to decide on categories of persons and entities that have access to current accounts in the books of the central bank.

### Cross-cutting recommendation on payment system wording
- If the wording of the payment system function is restricted to interbank payment systems, this restriction should be removed to accommodate public-facing CBDC designs.

### Monetary law: definition and relevance for CBDC
- Monetary law is the legislative and regulatory framework providing legal foundations for use of monetary value in society, the economy and the legal system.
- The basic principle of monetary law: it is for a sovereign State to determine and establish its own currency system (or for a monetary union to exercise this power collectively on behalf of member states).
- Central bank laws often include key provisions of monetary law; some countries also have a formal “monetary” or “currency act.”
- Constitutional provisions typically:
  - Allocate competency to adopt monetary law in federal states to the federal level.
  - Confirm that issuance of currency is a State matter.
- Constitutional language in some jurisdictions explicitly refers only to banknotes and coins, which may raise questions about the power to issue CBDC and may require constitutional or scholarly assessment.

### Monetary law concepts and questions for CBDC
- Monetary law regulates:
  - a) What is the official monetary unit (unité monétaire) of the country/monetary union and how its value is determined or defined?
  - b) What are the official means of payment (signes monétaires) of the country/monetary union?
- There is a strong legal link between the official monetary unit and official means of payment:
  - Official means of payment must be expressed in the official monetary unit.
  - Monetary obligations expressed in the official monetary unit can, in principle, be paid by tendering official means of payment.
- The unifying principle is “nominalism”: any monetary obligation must be satisfied by paying the exact amount stipulated.
- Fundamental monetary law questions for CBDC:
  - i. Is CBDC a new official monetary unit and/or a new official means of payment?
  - ii. Depending on (i), what are CBDC’s essential monetary law attributes?

### Official monetary unit and official means of payment
- Monetary law establishes the official monetary unit (e.g., Dollar, Euro, Yen) and often prescribes how its value is established (historically by gold, today often by foreign exchange markets and domestic policy).
- Official means of payment (“currency”) are legally sanctioned by the State/monetary union; main types are banknotes and coins.
- Five legal mechanisms through which the State sanctions a means of payment:
  - (i) the monopoly of issuance by the State or its agent,
  - (ii) cours forcé,
  - (iii) legal tender status,
  - (iv) privileges under private law,
  - (v) protection under criminal law.

### Issuance monopoly of the State
- In almost all countries, official means of payment are issued by the State and, in particular, its agent—the central bank.
- This monopoly of issuance is a response to historical instability when commercial banks issued their own banknotes with insufficient cover.
- Not all claims on the central bank are “currency”: central bank book money and central bank bills do not qualify as currency under law because they lack other defining features.

### Cours forcé and convertibility
- Cours forcé contemporary meaning: the value of a banknote is the amount of official monetary unit printed upon it by the issuer; banknotes are to be accepted in payment for that value without convertibility into gold coins (fiat money).
- Distinction between cours forcé and convertibility in other central bank liabilities:
  - The general public can in principle only convert banknotes into banknotes.
  - Current account holders of the central bank can convert banknotes into central bank book money, in principle without limitation, and vice versa—subject to central bank law, policies, and current account rules.
  - Under negative interest rates, some central banks try to limit this convertibility more through cost structure than by principle.

### Legal tender status
- Legal tender status grants currency the power to validly and definitively extinguish monetary obligations: by tendering legal tender, the debtor validly discharges his/her obligation.
- Jurisdictions differ on implementation:
  - In some, refusal to accept legal tender extinguishes the creditor’s claim and courts will consider the debtor to have validly paid.
  - In others, legal tender grants privileges to the debtor and creditors may be indirectly forced to accept legal tender; some countries impose administrative- or criminal sanctions on creditors who refuse legal tender.
- Legal tender rules apply unless law permits special contractual provisions stipulating otherwise; if no special agreement exists where allowed, the debtor always has the option to pay in legal tender means of payment.

*Source: wpiea2020254-print-pdf - 46.      What is the legal impact of the payment system function?*

### 67.      It is prevailing practice that a State/monetary union designates by legislation the

### It is prevailing practice that a State/monetary union designates by legislation the means of payment it has issued—its banknotes and coins—as legal tender.

### Legal tender practice and implications
- Prevailing practice: a State/monetary union designates by legislation the means of payment it has issued—its banknotes and coins—as legal tender.
- Some countries with an official dollarization or euroization policy designate foreign means of payment as legal tender either unilaterally or bilaterally and with or without parallel issuance of their own currency.
- Legal tender designation is a matter of State policy.
- Legal tender status is a means of sanctioning but not an essential feature of official means of payment; the link between official status and legal tender status is not absolute.
- Consequences:
  - Not all means of payment with legal tender status are “currency”: e.g., some jurisdictions attribute legal tender status, under restrictive conditions, to commercial bank book money and cheques.
  - Some banknotes do not enjoy legal tender status but can still be considered as “currency.”
- Practical limits and protections:
  - States can restrict legal tender scope (e.g., limit amount of banknotes and coins usable in one transaction for convenience or AML purposes).
  - Consumer-protection rules may restrict merchants from contracting away the right to pay in currency, granting the public an almost absolute right to make payments in legal tender currency.
  - Criminal law protections exist against refusal to accept national means of payment in some jurisdictions (examples cited include Section 19 (5) of the Central Bank of Nigeria Act and recent China circulars), and criminal sanctions protect against counterfeiting, damage, or destruction of officially sanctioned means of payment.

### CBDC under monetary law: unit and official status
- CBDC and official monetary unit:
  - Introduction of CBDC would not change a State/monetary union’s establishment of its official monetary unit: CBDC is not expected to be a new “currency unit.”
  - If the central bank is authorized to issue CBDC, it will digitally issue a liability denominated in the official monetary unit, as are other central bank liabilities (banknotes and coins, book money and bills).
  - This design should, in principle, guarantee constant convertibility at par of CBDC with other central bank monetary liabilities (banknotes and book money).
- Legislative alternative:
  - Monetary law could establish a new, second monetary unit for CBDC, but such legislation must establish the mechanism for determining the exchange rate with the existing monetary unit.
  - Historical experience shows populations are likely to continue using the original monetary unit, which obviates the need for a second unit and complicates monetary policy.

### Token-based CBDC: issuance, monopoly, convertibility, interest, and legal status
- Issuance by the State:
  - Provided the central bank law adequately authorizes its issuance, token-based CBDC is to be considered as a valid central bank liability and can unqualifiedly be considered as issued “on behalf of the State.”
- Monopoly question:
  - Many central bank laws grant a legal monopoly for issuance of banknotes; if CBDC is equated with “currency,” question arises whether central banks should be granted a monopoly for issuance of digital currency.
  - Extending the issuance monopoly to digital currency legally is straightforward: expand monopoly provisions to cover “bearer on demand notes, in paper and any other material or immaterial (including digital) form.” Related criminal provisions would need review and narrow interpretation under criminal law principles.
  - Policy choice: whether to grant monopoly is ultimately political and policy-driven; private issuance of digital tokens resembling CBDC could recreate historical problems from private banknote issuance that could not be honored.
- Cours forcé and convertibility:
  - Legislation can grant token-based CBDC cours forcé status, similar to banknotes: the value of CBDC will be the amount digitally attributed to the token.
  - Banknotes and token-based CBDC would be expected to be mutually fully convertible as “bearer on demand” claims on the central bank under most legal systems, absent specific rules to the contrary, presupposing equal value (unless token-based CBDC carries interest).
  - Convertibility into central bank book money: for central banks that open current accounts only for the State, public bodies and banks, the general public will not be authorized to convert token-based CBDC into central bank book money; authorized account holders will be.
- Can token-based CBDC carry interest? (Box 6 summary)
  - Historical and legal considerations make it legally questionable that banknotes can carry interest.
  - Token-based CBDC follows the same cours forcé logic as banknotes: it is a means of payment for the amount of its face value. Charging interest on token-based CBDC would break the link between face value and actual value, complicating extinguishment of obligations and convertibility; thus charging interest on token-based CBDC does not appear legally robust.
  - By contrast, account-based CBDC could legally carry interest, including negative interest, if policymakers choose; the interest rate for account-based CBDC would be the same as for similar credit balances held on current account in the books of the central bank.
- Legal tender status of token-based CBDC:
  - Legislation could grant legal tender status to any means of payment, including token-based CBDC.
  - Practical and legal concerns: granting legal tender to token-based CBDC raises issues if large parts of the population are not technically able to receive token-based CBDC, and would require imposing acquisition of technical infrastructure—raising proportionality, fairness, and financial inclusion concerns.
  - Possible intermediate approach: grant legal tender status to token-based CBDC only for certain recipients (e.g., the State, public bodies, merchants beyond a certain size, or certain authorized private entities).
- Private law privileges and implications:
  - Private law status of token-based CBDC is unclear in most countries and requires deeper analysis.
  - Consideration could be given to granting token-based CBDC a hybrid property law status (intangible for some issues, tangible for others), but if technological infrastructure allows tracing (e.g., distributed ledger), token-based CBDC might be considered a full-fledged intangible, making many banknote-like private law privileges less sensible.
  - The private law status is crucial to determine whether token-based CBDC can be lent by its owner to a commercial bank; if lending is possible, token-based CBDC could be deposited with a commercial bank and integrated into fractional reserve banking. If not, token-based CBDC would exist outside the banking system, with major monetary and financial implications.
  - Legal traditions may struggle with recognizing mutuum-type lending for intangible goods; this issue requires analysis by monetary and private law specialists.

*Source: wpiea2020254-print-pdf - 67.*

### 84.      Criminal Law Protection—Most jurisdictions will not be able to apply their

### Criminal Law Protection—Most jurisdictions will not be able to apply their counterfeiting rules to token-based CBDC

### Criminal law and digital counterfeiting: findings
- National criminal law frameworks to date focus on the suppression of counterfeit banknotes and coins and do not explicitly address counterfeiting of CBDC.
- Traditional counterfeiting provisions and central bank law counterfeiting clauses are articulated in terms of physical currency (e.g., “paper money (including banknotes) and metallic money”).
- The foundational criminal law principle nullum crimen, nulla poena sine lege (no crime or punishment without law) constrains the criminalization of electronic counterfeiting unless specific legal bases exist.
- Distributed ledger technology may mitigate some enforcement concerns, but technical traceability does not by itself create a criminal-law basis.
- Cyber security law is an existing body of national and public international law that could be used—consistent with nullum crimen, nulla poena sine lege—to address digital counterfeiting of CBDC; this requires further specialist investigation (Annex III).

### Illustrative statutory and international references from the source
- Example central bank criminal provision: Article 64 of the Organic Constitutional Law of the Central Bank of Chile (as amended): “Whoever manufactures or sets in circulation objects whose shape resembles banknotes of legal tender in a manner that such forged banknotes are easily accepted in place of the real ones, shall be penalized with 541 days to 5 years of imprisonment.”
- Example mutilation provision: U.S. statute 18 USC 333 criminalizes mutilation, defacement, etc., of bank bills.
- Example fine: Reserve Bank of New Zealand Act Section 28(1) — contravention makes the perpetrator liable on conviction to a fine not exceeding $ 1000.
- International treaty: Geneva Convention for the Suppression of Counterfeiting of April 20, 1929 (still in force) defines “currency” and requires states to criminalize specified counterfeiting acts.
- International cybercrime treaty: Budapest Convention on Cybercrime (Council of Europe), adopted November 23, 2001, provides an international framework for cybercrime cooperation and has been signed/ratified by many states.

### Implications for token-based CBDC
- Under current law, token-based CBDC will generally not qualify as “currency” (legal status typically reserved for physical banknotes and metallic coins).
- Even if token-based CBDC were legislatively labelled “currency,” extending the full suite of legal privileges (private-law privileges, legal tender, criminal counterfeiting protections) faces three main obstacles:
  - Legal tender allocation is problematic where large population segments lack technical means (computer/smartphone) to receive payment.
  - Token-based CBDC lacks a settled private law classification, complicating extension of private-law privileges intended to promote circulation.
  - Criminal law protection against electronic counterfeiting raises conceptual questions about whether electronic counterfeiting fits existing criminal-law categories.

### Implications for account-based CBDC
- Book money cannot be counterfeited in the physical sense; traditional counterfeiting rules do not apply to account-based CBDC—however, criminal law on fraud and cyber security/hacking remain relevant.
- Account-based CBDC issuance to banks raises few central bank law issues and will be considered a valid central bank liability; issuance to the general public may require targeted reform of central bank law.
- Central bank book money typically lacks legal tender status; account-based CBDC need not be granted legal tender status when used only between financial institutions.
- Private-law treatment: account-based CBDC is an intangible transferable by debits and credits; nemo dat applies and protection of the bona fide acquirer does not exist for intangibles.
- Attachment and garnishment issues: creditors seeking to attach a debtor’s CBDC account balance must direct orders to the central bank; many central bank laws protect central bank accounts from judicial attachment—a protection that raises policy questions if extended to public accounts.

### Policy recommendations and reform options
- Central bank law reform (recommended):
  - Provide a robust, ideally explicit, legal basis in central bank law authorizing issuance of CBDC (both token-based and account-based), by text that authorizes issuance of “currency in digital form” and permits opening accounts for designated accountholders.
  - Example draft central bank law provisions (Annex I): authorize the Central Bank “to issue banknotes, coins and currency in digital form” and to open current accounts for the State, public bodies, banks, and other categories of accountholders established by the governing board.
- Monetary law reform (more challenging, especially for token-based CBDC):
  - To equate token-based CBDC with banknotes will require significant monetary law reform, including consideration of whether to grant legal tender status and whether to limit such status to a closed category of sophisticated entities (State, public bodies, large merchants, authorized firms).
  - Authorities must analyze private law classification and whether to grant token-based CBDC private-law privileges to promote circulation.
  - Definitions of cybercrime offences may need review to ensure explicit coverage of cybercrime offences against CBDC.
- For account-based CBDC, no monetary law reform is recommended at this stage; it can operate within existing frameworks for central bank book money if central bank law authorizes access.

### Conclusions from the source
- Token-based and account-based CBDC are legally very different: token-based CBDC is a new form of money (a central bank liability incorporated in a digital token); account-based CBDC is book money in digital form.
- Few current central bank laws explicitly authorize issuance of digital-token liabilities; many central bank laws do not authorize accounts for the general public. These legal gaps can be remedied through amendments to central bank law.
- Neither form of CBDC would constitute a “new monetary unit”; CBDC would be a means of payment expressed in the official monetary unit.
- Countries should carefully consider and codify the legal foundations of CBDC, ideally within a broader review of related legal areas (private law, tax law), rather than relying solely on broad interpretations of existing provisions.

*Source: wpiea2020254-print-pdf - 84.      Criminal Law Protection—Most jurisdictions will not be able to apply their*

### Box 3. Budapest Convention on Cybercrime

### Box 3. Budapest Convention on Cybercrime

### Scope and definition
- The Budapest Convention aims to harmonize the national criminal substantive law elements of offences in cybercrime and establishes a mechanism for international cooperation against cybercrime.
- The Budapest Convention does not explicitly mention offences against central bank digital currencies.
- Article 1 of the Budapest Convention defines computer data to mean “any representation of facts, information or concepts in a form suitable for processing in a computer system, including a program suitable to cause a computer system to perform a function”. This definition could reasonably be taken to include data incorporated in a central bank digital currency.

### Relevant substantive offences (particularly applicable to forgery, fraud, and interference with CBDC)
- (i) intentionally damaging, deleting, deteriorating, altering or suppressing computer data without right (Article 4),
- (ii) Intentionally (seriously) hindering without right the functioning of a computer system by inputting, transmitting, damaging, deleting, deteriorating, altering or suppressing computer data (Article 5),
- (iii) intentionally producing, selling, procuring for use, import, distribution or otherwise making available devices, including computer programs, designed or primarily adapted for the purpose of cybercrime (Article 6),
- (iv) committing intentionally and without right, the input, altering, deletion, or suppression of computer data, resulting in inauthentic data with the intent that it be considered or acted upon for legal purposes as if it were authentic, regardless whether or not the data is directly readable and intelligible (computer-related forgery) (Article 7),
- (v) causing the loss of property to another person by any input, alteration, deletion or suppression of computer data (computer-related fraud) (Article 8), and
- (vi) the infringement of copyright and related IP rights (Article 10).

### Legal implications for CBDC
- The broad wording of the cybercrime offences is sufficient to cover intentional mutilation of central bank digital currency through “intentionally damaging, deleting, deteriorating, altering or suppressing computer data without right” (Article 4).
- The principle of nullum crimen sine lege, nulla poena sine lege would require authorities to precisely define the cybercrime offences against CBDC.
- Most jurisdictions will not be able to apply their counterfeiting rules to token-based CBDC.
- Criminal law rules on counterfeiting will not apply to account-based CBDC as book money cannot be counterfeited.
- Cyber security law could provide special protection to the integrity of the central banks’ IT systems that are used to issue account-based CBDC.

*Box 3. Budapest Convention on Cybercrime*

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_Source: https://www.imf.org/-/media/files/publications/wp/2020/english/wpiea2020254-print-pdf.pdf_