Case Notes: An Exploratory Analysis of Central Bank Digital Currencies — Some Considerations

The history of central banking began with payment services. Ever since then, payment-related innovation has always been an integral part of central banking (BIS Committee on Payments and Market Infrastructures and Markets Committee Report, ‘Central Bank Digital Currencies’ (2018) iii). Payments have evolved extensively over the years with the emergence of various technologies, from the development of real-time gross settlement (‘RTGS’) systems, to electronic money and mobile money, to name a few. The arrival of financial technologies or ‘fintech’ has led to cryptocurrencies and now central bank digital currency (‘CBDC’) (on cryptocurrencies, see Reddy & Lawack, ‘An overview of the regulatory developments in South Africa regarding the use of cryptocurrencies’ (2019) 31 SA Merc LJ 1–28; see also Deloitte, ‘Are Central Bank Digital Currencies (CBDCs) the money of tomorrow?’, available at https://www2.deloitte.com/ie/en/pages/financial-services/ articles/central-bank-digital-currencies-money-tomorrow.html, accessed on 3 May 2021). A CBDC represents another potential innovation in the area of an evolving branch of the law called ‘fintech law’. This exploratory analysis provides an overview of the meaning of CBDC and the legal nature of money and CBDC. In addition, it provides a broad overview of some legal implications, policy considerations and regulatory issues. Challenges and risks are also highlighted.