莫卡特斯中心-王国的新硬币？央行数字货币作为新型公共货币（英）

POLICYBRIEF

ANewCoinoftheRealm?

CentralBankDigitalCurrencyasNewPublicMoney

ChristinaSkinner

June2023

ThepurposeandroleoftheFederalReserve(theFed),likethoseofmanycentralbanks,havebeenunderintensereexaminationsince2020.TheFed’scrisis-fightingpowershaveexpandedorgani-callyalongsidemountingpressuretoaddressawiderarrayofsocialandeconomicjusticeissuesrangingfromclimatechangetoinequality.1Centralbanksarealsoreexaminingtheirroleofsup-plyingpublicmoneyandconsideringwhethertocreateadigitalformofpublicmoney,referredtoascentralbankdigitalcurrency,orCBDC.

Forthemostpart,centralbanksaroundtheworldseemeagertocreateCBDCs.Nearlyeverycentralbankisactivelystudyingandconsultingthepublicontheissue,andatleastthreecentralbanks,includingthePeople’sBankofChina,havefullylaunchedaCBDC.2GiventheUnitedStates’uniqueconstitutionalstructure,whichplacescertainlimitsontheFed’sauthority,combinedwiththeglobaldominanceandimportanceofthedollar,whethertheFedshouldcreateaCBDCisaquestionoftremendousdomesticandinternationalsignificance.

Todate,policypapershaveexaminedthefeasibilityofaCBDCfromatechnologicalstandpoint,

andeconomicanalyseshavereflectedontheimpactofaCBDConfinancialsystemstructureandmonetarypolicytransmission.Littleattentionhasbeenpaid,however,tothelegalelephantintheroom:HowwillCBDCtransformindividuals’rightsinpublicmoney?AndhowwillCBDCtransformtherelationshipthatmoneycreatesbetweenpeopleandthestate(and,inthiscase,thecentralbank)?Here,IpresentsomehighlightsfrommyforthcomingarticleintheUniversityofPennsylvaniaLawReview.3

3434WashingtonBlvd.,4thFloor,Arlington,VA,22201•703-993-4930•

TheviewspresentedinthisdocumentdonotrepresentofficialpositionsoftheMercatusCenterorGeorgeMasonUniversity.

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CENTRALBANKDIGITALCURRENCY:TOOGOODTOBETRUE?

Tostart,it’shelpfultobrieflyexplainwhataCBDCis.IntheUnitedStates,asinmostWesterncapitalisteconomies,therearetwobasiccategoriesoflegal-tendermoney:publicandprivate.TheFedissuespublicmoney.Itconsistsofcurrency(cashandcoins)andisavailabletohouseholdsandbusinesses,thatis,theparticipantsintherealeconomy.Publicmoneyalsoincludescentralbankreserves,whicharesupplieddirectlyandonlytothefinancialsystem.Banks,meanwhile,issueprivatemoneyintheformofdemanddeposits.Whenabankmakesaloan,itdepositsmoneyintoaborrower’saccount,thuscreatingmoney.ThissystemwasestablishedintheNationalBankActsof1863and1864,whichcreatedthenationalbankingsystem.Fromaneconomicpointofview,currencyanddemanddepositsareequal:botharecompletelyfungible,interchangeablemediaofexchangeandstoresofthedollar’svalue.

CreatingaCBDCwouldrepresentanew,thirdkindofpublicmoney,onethatisdigitallyissuedbytheFed,likebankreserves,andalsoavailabletoeverydaycitizens,likebankdeposits.AdigitaldollarwouldbeissuedbytheFeddirectlytocitizensbutheldinanaccountmaintainedbyabankornonbankinstitution(awallet).Butratherthanowningacontractualliabilityofabank(abank“IOU”),theholderofaCBDCwouldholdsomethingthatappearsonthebalancesheetoftheFed.

Forthepastthreeyears,mostcentralbankerswhohavespokenpubliclyaboutCBDChavefocusedonthebenefitsofCBDC(thoughtheFedhasbeenmoreneutral).ThesecentralbankersclaimthataCBDCissaferthanprivatelyissueddemanddepositsbecauseitcarrieslesscreditrisk.CentralbankersalsoexpectaCBDCwillgiverisetopaymentefficiencies—namely,lowercost,fasterspeed,wideraccess—bothdomesticallyandinternationally.

TherearealsoseveralpolicyreasonscentralbankerswouldliketocreateaCBDC.Principally,theseincludecrowdingout“stablecoins”(cryptocurrenciesthatpegtheirmarketvaluetosome-thingstable,oftenasovereigncurrency,liketheUSdollar),whichtheyperceiveasarisktotheirmonetarypolicytransmission;dampeningthefinancialstabilityimplicationsofthecontinuedproliferationofunregulatedstablecoins;andimprovingtheinclusivenessofthefinancialsystem.SettingtoonesidethequestionofwhetheranyofthesebenefitsisinfactlikelytoaccompanyaCBDC(orwhetherthesearejust“redherring”),thecostsideoftheledgerisstillunderexamined.

MONEYASA“BUNDLEOFRIGHTS”

ThebestwaytocompareCBDCtoexistingstate-issuedmoneyistoreflectonmoneyasa“bundleofrights.”Thisdiffersfromtheeconomicviewofmoney,whichfocusesonitsfunctionalityasamediumofexchange.Thebundle-of-rightsconstructionputstheemphasisnotonhowmoneyisusedbutratheronhowmoneycanempowerthestaterelativetopeopleandviceversa.Thisanalysisiskeybecause,althoughCBDCmightseeminnocuousorlikenothingnew(fromaneco-nomicusagestandpoint),thebundle-of-rightsperspectivecastsCBDCinaverydifferentlight.

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Thefirststickinthebundletoconsiderpertainstomonetarysovereignty.Thetermmonetarysov-ereigntyhasbeenassertedintheCBDCconversationsasanunquestionableandinfalliblereasontomaximizethestate’sabilitytoissue(really,control)acountry’scurrency.ThistranslatesintoanurgentneedtocreateaCBDCtorivalprivatedigitalcurrencies,mostlythespecterofawidelyusedstablecoin.(Unbackedcryptocurrency,thoughitpurportstoreplacesovereigncurrencies,isnotreallytakenseriouslybymostcentralbankers.)

Asamatterofinternationalmonetarylaw,thisstrongnotionofmonetarysovereigntyisaccurateandjustifiablesofarasitgoes:clearly,nonationshouldbeabletocurtailanother’suseofitssov-ereigncurrencyormonetarypolicy.Butasamatterofdomesticlaw—thatis,whetherthestateisthesupremeauthorityovermoney—thenotionofmonetarysovereigntyposesadifferentquestion.Toanswerit,onemustconsulttheintellectuallegalhistoryofthepowerofthesovereign(i.e.,aprinceoremperor)overmoney—ahistorythatdatesbackatleasttoRomantimes.

Theupshotofthishistoryisthatformostofit,thesovereignhadtheexclusiveprerogativetocreatethemoneythatwasusedwithintherealm.Thislegalsetpointmakessense,ofcourse,ifonealsobelievesthattheprincehasanatural-lawrighttoreignsupremeintheland.Asone16th-centurywritersummeditup,“Indeed,afterlawitself,thereisnothingofgreaterconsequencethanthetitle,value,andmeasureofcoins,aswehaveshowninaseparatetreatise,andineverywell-orderedstate,itisthesovereignprincealonewhohasthispower.”4

WhentheUSConstitutionwasdrafted,itsFramerstookanintentionallydifferentapproach,knownaspopularmonetarysovereignty,tomirrorAmerica’sgeneralapproachtopopularsover-eigntyandself-government.Theysawtheold-worldapproachtomonetarysovereigntyasnoth-ingshortofanenableroftyranny.5TheFoundinggenerationbelievedthatthepeople,whoareafterallthesovereigninAmerica,shouldhavearighttocreatemoneycoequaltoifnotgreaterthanthestate’srighttodoso.Accordingly,theConstitutioncontainslanguageprohibitingstatesfromcreatingtheirowncurrenciesandlimitingthefederalgovernment’sroletothatofcoining(mintinghardcurrency).Thisimpliedaroleforprivateactorstoissuepaperorotherformsofmoneyassocietyneeded.

TheFramersknewthat,withfullpowerovermoney,sovereignslikekingswouldfrequentlyresorttooverissuingcurrency—tofundwarsorotherdiversions—resultingininflation.So,theyinten-tionallylimitedthestate’sroleinissuancetothepowertocoinandleftamplespaceforaprivatesectorissuancesystemtoserveasacheckonthestate’stendencytoabusethecurrency.

CBDCwouldshiftthisbalance,whichhasmoreorlessheldfirmsince1776.TheuptakeofaCBDCwill,atleasttosomedegree,disintermediatebanks.Today,themajorityofthemoneysupplyisissuedbytheprivatesector;6CBDCputsathumbonthescaletotiltthedemandfor(andthesup-plyof)moneyfromthebankingsectortotheFed.Aswillbediscussed,thiswillempowerthestateinsomeknowablebutalsolikelyunknowableways.

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RelatedtothequestionofwhocreatesmostofthemoneyinAmerica—theFedortheprivatesec-torbanks—thesecondstickinthebundleconcernswhatrightspeoplehavetotheunderlyingvalueofmoney.Mostpeopletakeforgrantedthatthemoneytheypossessintheirbankaccountsistheirpropertyinthesensethatthevaluethattheirbalancesrepresentcannotbeadjustedarbi-trarilybythestate.Butagain,thiswasnotalwaysthecase.Sovereignswouldfrequentlyresorttodebasementtoavoidtheunpleasantnessassociatedwithtaxationorborrowing,foistingthepainofinflationontothepopulationatlarge.This,too,theFramersunderstoodandthuslimitedthepresident’sabilitytocontrolmoneybylodgingthepowertocreatemoneyinArticleI,whichlistspowersthatareexclusivelyreservedtoCongress.

ThefederalcourtsinterpretedtheConstitutionassuch.Untilthe1930s,courtsroutinelyprotectedeconomicrightsaspropertyrightswithheightenedconstitutionalscrutiny.Theirrationalewasthatindividualshadfundamentalrightstothevalueofthingsoverwhichtheycouldexerciseself-ownership—suchasphysicalproperty,intellectualproperty,andthederivativefruitsoftheirlaborandskill.7

Andourmonetaryregimemoreorlesstrackedwith“property-in-value”view.Forone,maintain-ingfidelitytosomeversionofthegoldstandarduntil1971reflectedrespectforthenotionthatmoneyhadareferencevaluethatwasexternaltopoliticalforces.EvenwhentheUnitedStatesdidadoptafullyfiatcurrency,CongresswouldshortlythereafterencourageprivatesectormoneycreationintheformofMoneyMarketFundsandrestraintheFedfromundercuttingbankingservicesthroughtheMonetaryControlAct,upholdingagaintheviewthattherewouldbesomerestraintonthestate’sabilitytounderminethevalueofcurrencyfornefariousreasons,suchastopursuepublicpolicythatdidnothavewidespreaddemocraticassent.

CBDCisapolicytool,notapropertyright.Asconceptualized,CBDCofferspolicymakersanewvehicleformakingfiscaltransfersmoreefficiently,imposingnegativeinterestrates,andreducingdemandforvariousformsofprivatemoney.Thispolicytoolcarriesmanyvariables:howmuchCBDCanyoneindividualcanhold,whattheinterestrateontheinstrumentwillbe,andevenpos-siblywhethersomegroupsofpeoplemayhaveaccesstoCBDCononesetoftermsversusanother.ThesevariablesarepossiblethankstotheprogrammablenatureofaCBDC.

Yetprogrammablemoneyisnotanunalienablepropertyrightofthekindwetypicallyassociatewiththenatural-lawtraditionadoptedbytheFramersandintendedintheConstitution,andsoitleavesopenthequestionsofifandhowone’svalueinaCBDCcouldbeadjustedbythestatetomeetitsobjectivesoraddressperceivedemergenciesatanypointintime.Emergenciesoftenresultinerosionsofcivilliberties,temporaryorpermanent;thequestioniswhetherCBDCwouldusherAmericaintoanageinwhicheconomiclibertiesareincreasinglysuspendedaswell.

Together,therightsassociatedwithpopularmonetarysovereigntyandproperty-in-valueimposelimitsonthesovereign’s(inourcase,thepresident’s)abilitytousemoneyasawayofaccretingpowertothedetrimentofthepeople.

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Finally,thethirdstickinthebundlerelatestoprivacyinone’smonetarytransactions.Therearetwoelementstoconsiderhere.Currently,retailpublicmoney—again,thisiscashandcoin—offerscompleteprivacy;itiswhatiscalledabearerinstrument,meaningitsvalueisrecognizedimmedi-atelyuponpresentationregardlessofitsprovenance.Incontrast,demanddepositsaresubjecttointenselevelsofgovernmentscrutinypursuanttotheBankSecrecyAct,whichrequiresthatbanksconductduediligenceontheirdepositorcustomersandmonitoralltransactionsoveracertaindollarthresholdforsuspiciousactivity(i.e.,thefinancingofillicitactivityortaxandsanctionsevasion).TheSupremeCourtdeterminedlongagothatthereisnoFourthAmendmentprivacyrighttothecontentsandmovementsintoandoutofone’sbankaccount.8

GiventhatCBDCwill,ifitcomestopass,beheldbyfinancialintermediariesactingastheFed’swallet,CBDCwillcertainlybesubjecttothesamesurveillancerequirementsthatdemanddepos-itsare.Underthisintermediatedmodel,theprivatesectorwouldofferaccountsordigitalwalletstofacilitatethemanagementofCBDCholdingsandpayments.9Centralbankshaveessentiallyadmittedthat,largelyfornationalsecurity-relatedreasons,theyhavenodesiretocreateaCBDCthatfunctionslikeabearerinstrument(inmyopinion,rightlyso),andtheyotherwiselackthetechnologicalcapacitytooffercash-likeprivacyonanaccount-basedCBDC(atleastrightnow).

Asidefromprivacy,thereisthequestionofwhocapturesthevalueinone’spaymentsdata.Anindividual’spaymentstransactionhistoryisvaluabledatatoarangeofprivatecorporations;itcanalsobevaluabletothestateintailoringpublicpolicyor(lesscharitably)circumventinglegallimitsorloopholesthatwouldotherwiseimpedesuchpolicy.

THEFEDASAPEOPLE’SBANK?

ACBDCislikelytoincreasetheFed’spoweryetsimultaneouslyreduceitsindependencefromthepoliticsoftheexecutivebranch(andpossibly,fromthoseinCongress).

HowwillCBDCincreasetheFed’spower?Inthemoststraightforwardsense,becausetheFed(likeothercentralbanks)hasreassuredthepublicthatcashwouldnotberetiredimmediatelyalongsidetheissuanceofCBDC,creatingCBDCcouldincreasetheliabilitysideoftheFed’sbal-ancesheet.10Fromthere,therearetworelevantaspectstoconsider:first,whatassetswouldtheFedthenproceedtobuytomatchthesenewlycreatedliabilities;andsecond,howmuchCBDC(and,correspondingly,howmanynewassets)wouldtheFedcreate(andthenbuy)?

AsforwhattheFedwouldbuy,therearethreemainoptions,eachwithitsowncanofworms.ThefirstoptionwouldbefortheFedtobuymoreTreasurysecurities,asitdoesintheordinarycourseofopenmarketoperations.WouldlargequantitiesofthesenewpurchasesaltertheincentivesinCongressandtheexecutivebranchtoexercisefiscaldisciplineiftheFedisstandingreadytoabsorbmoregovernmentdebt?

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Relatedly,wouldtheTreasuryresumeitspre-1950spracticeofpressuringtheFedtobuygovern-mentdebt,orsetratesthatwouldbefavorabletoitsissuanceonceitknewthattheissuanceofaCBDCwasavailabletocreateadditionalheadroomformorebondpurchases?ThereintroductionofsuchadynamicwoulddramaticallyunderminetheFed’sindependencefromthepresident.

OnealsowonderswhethertherewouldbeenoughTreasurydebtfortheFedtobuy.Whilethatseemsafar-offproblemintoday’seraofrisingdeficits,theFeddidinfactforatimeworrythatitwouldrunoutofTreasurydebttobuyinthe1990s.11Itconsideredwhatelseitcouldlegallyandsensiblyaddtotheasset-purchasemenu.

Thisbringsustooptiontwo:corporatebonds.ButbuyingcorporatebondsisproblematicfortheFed’sindependenceaswell,asitrequiresthecentralbanktochoosewinnersandlosersintheeconomy—insofarasitisallocatingcredittosomesectorsandnotothers—whichis,atbase,afiscalfunctionthatshouldbereservedforelectedleaders.FortheFedtoassumethisjobopensthedoortotheexecutivebranchorCongresstopressuretheFedtobuythebondsofpoliticallyfavoredsectorsandforgothosethatarenotinthemajority’sgoodgraces.

Thethirdoptionisabitmoreesoteric,butitbearsmentioninlightofthegrowthofwhatIhaveelsewherereferredtoasthe“MonetaryExecutive”;thesubconstitutionaltraditionofthepresi-dentexercisingunilateralmonetaryorfiscalpowersthatbelongtoCongress.12Section14oftheFederalReserveActalsopermitstheFedtobuyagencydebt.InaworldwithCBDC,wouldtheFedlikewisebepressuredbyanadministrationtobuyawiderrangeofagencydebttoincreaseaparticularagency’sfundingwithoutgoingthroughappropriations?Fundingnewclimateinitia-tivesattheEPAmightbeagoodhypotheticalandcontemporaryexample.

Finally,CBDCwouldestablishforthefirsttimeadirectrelationshipbetweenhouseholdsandtheFed.Thisimmediatelyputsonthetablepolicyinterventionsthattodaywouldseemanathematoanindependentcentralbank.Theseinclude,forexample,so-called“people’squantitativeeas-ing”—theideathat,duringacrisis,theFedcouldinitiatehelicopterdropsforeverydaypeople(i.e.,issueCBDCanddistributeittoallaccounts,justlikeafiscalstimulusbutwithoutthecorrespond-ingdebt).13Alternatively,CBDCmightsmooththepathforfuturelegislativeinitiativestousetheFedtolendtotherealeconomymuchliketheCARESActdid.14This,however,wouldpositionthecentralbankinanindustriallendingrole—aroleCongresslongagoabandonedinrecognitionthatitwasnottheproperroleofanindependentcentralbank.15Onemightevenimaginethecentralbankfacingpressuretocreatesomethinglikeanovernightreverserepurchaseagreementfacil-ityforhouseholds,inwhichloansweremadetostrugglingfamiliesacceptingliensagainstone’shouse,car,orappliances.Thepointis,oncethecentralbankbillsitselfasthe“People’sBank,”howwillitproceedtodrawthelinewhenaskedforhelpbypeopleindistress?

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CONCLUSION

Ultimately,theseshiftingdynamicsbetweentheFed,theTreasury,andthepresidentredoundtotheindividualeconomicrightsanalysisasdiscussed.AlthoughaCBDCmightappearatfirstblushtogiveindividualsmoreeconomicfreedom,inrealityitspursastrongerstate,withmoreleverstopullinanemergency(butwithfewerchecks),andalmostcertainlyalessindependentcentralbank,onemoresuspectabletopressurefromthepresidentandcontinuingpopulistentreaties.

NOTES

1.SeeChristinaParajonSkinner,“CentralBankActivism,”DukeLawJournal71(2021):247(describingtheincreasingdemandsontheFedtoexpandpolicyobjectivestocombatsocialandpoliticalissues).

2.“CentralBankDigitalCurrencyTracker,”AtlanticCouncil,2023,accessedMay9,2023,

/cbdctracker/

.

3.ChristinaParajonSkinner,“CentralBankDigitalCurrencyasNewPublicMoney,”UniversityofPennsylvaniaLawReview172(2023).

4.JeanBodin,Bodin:OnSovereignty,trans.JulianH.Franklin(NewYork:CambridgeUniversityPress,1992),78.Accord-ingtoonemodern-daycommentator,AdamWoodhouse,“Buridan’sprincenotonlyretainsthelegalmonopolyoncontrollingallaspectsofmonetarypolicy,buthecanalsoescapemoralcensurefordebasingthecoinageifheclaimstoactundernecessity.”SeeAdamWoodhouse,“‘WhoOwnstheMoney?’Currency,Property,andPopularSovereigntyinNicoleOresme’sDemoneta,”Speculum92,no.1(2017):101.

5.SeeChristinaParajonSkinner,“TheMonetaryExecutive,”GeorgeWashingtonLawReview91(2023):164.

6.Onebroadmeasureofthemoneysupply,M2,wasat$21.4trillionattheendof2022.Theportionofitpro-videdbytheFed—currency—wasonly$2.3trillion.“FREDEconomicData,”FederalReserveBankofSt.Louis,

/graph/?g=15jIx

(accessedMay25,2023).

7.SeeCoppagev.Kansas,236U.S.1,26(1915)(courtinvalidatingasviolationsoflibertyandpropertyrightsprotectedbytheDueProcessClausesoftheFifthand14thAmendmentslawsthatprohibitedemployersfromforbidding

theiremployeestojoinlaborunions);Chas.WolffPackingCo.v.CourtofIndustrial