Legal Regulation of Digital Money Issuance and Circulation

Abstract

The article considers the issues of legal regulation of new forms of money that have appeared quite recently or may appear in the coming years. At this stage of development, their legal status is not determined, and Russia will have to choose the most appropriate model for their regulation. First of all, the trends in the development of money forms are researched, since it is the development of information technologies that made the emergence of the phenomenon of digital money (cryptocurrency) possible. The authors note that the concepts of digital money and electronic money are mixed in Russia, which is quite incorrect. Only electronic money in Russia is currently the official legal category while new forms of digital money are still outside the legal field. The next important issue is the choice of a regulatory model for the use of digital money. The authors distinguish two models. In the first model, the issuer of digital money is the central bank. At the same time, the functions of the central bank are to develop their own decentralized system, in which a single type of cryptocurrency will circulate. In accordance with the second model, the functions of the central bank include only the licensing of financial organizations and other participants to conduct operations with private cryptocurrencies. The authors note that, despite global trends in the use of ``private money'', it cannot be fully recognized as money, since the essence of money is revealed through its functions, and modem private cryptocurrencies cannot perform all the necessary functions, but only individual ones. It seems that due to national traditions and a high degree of centralization of public administration, the first model seems preferable for Russia. At the same time, an attempt to regulate and create digital money issued by central banks can be an impetus for the actual formation of new types of monetary systems based on the use of, e.g., private digital money. In the course of the work, the authors explore the legal aspects of regulating the issue of digital money by the Bank of Russia and come to the conclusion that, when deciding on the implementation of the first model of using digital money, neither the Constitution of the Russian Federation nor the Civil Code contain restrictions on issuance of digital money by the Russian Central Bank. The main restrictions, which are analyzed in this article, are enshrined in the Federal Law ``On the Central Bank of the Russian Federation (Bank of Russia)'', since this law does not provide for the powers of the Bank of Russia to issue its own national digital currency. In this regard, the authors propose to eliminate these restrictions and expand the powers of the Bank of Russia to issue digital money for a wide range of people. Amendments to the federal law proposed in the work will allow creating a more flexible and reliable system of payments based on digital money of the Central Bank and will strengthen the financial inclusion for different segments of the population.