CHALLENGES IN UNDERSTANDING THE CONCEPT OF MONETARY JURISDICTION IN THE DIGITAL ENVIRONMENT
CHALLENGES IN UNDERSTANDING THE CONCEPT OF MONETARY JURISDICTION IN THE DIGITAL ENVIRONMENT

Author(s): Marko Dimitrijević
Subject(s): Law, Constitution, Jurisprudence, Sociology of Law
Published by: Institut za uporedno pravo
Keywords: digitalisation; central bank; monetary law; monetary jurisdiction; monetary innovations
Summary/Abstract: The subject of the analysis in the paper is an overview of the features and ways of implementing the concept of monetary jurisdiction in the context of the information revolution and the digital environment, which implies the need to adjust the established monetary-legal settings that arose in the period of classical monetary legislation to the tendency of commercialization of monetary and financial innovations (even when these innovations in a legal and technical context have not been sufficiently developed to guarantee legal predictability and the security of transactions in monetary circulation, which represents a kind of monetary-legal paradox). Namely, in contemporary monetary law and the law of central banks, the concept of monetary jurisdiction refers to the area of state territory where (primary and secondary) monetary legislation is applied to protect monetary stability as a public good, as well as the special economic rights of citizens who live within it (monetary inhabitants) to have a solid and stable currency. As such, the concept of monetary jurisdiction is a reflection of state nominalism (i.e. the dominance of the state theory of the legal concept of money), of which courts in monetary disputes, as a special category of administrative disputes, in which the active and passive procedural legitimation of central banks should be aware must take account. Although the concept of monetary jurisdiction has for a long time, in the science of monetary law, displayed elements of a (relatively) static category (due to the unquestionable validity of state nominalism, according to which only the state, i.e., the central bank has the legal authority to issue money), the normative dynamism that shapes it today, more than ever before in monetary history is conditioned by the emergence of decentralized financial technologies that have led to not only the emergence of private digital money (thereby actualizing the social theory of money in which the attitude of citizens about what will be used as money is crucial for the survival of monetary units), but also extensive research into issuing digital money by central banks as a new form of sovereign (public) money. This development imposes the need to adjust the concept of monetary jurisdiction so that it becomes more digital (and at the same time less territorial-physical, because it is not exhausted within the borders of the bearer of monetary sovereignty), which gains special complexity when consumers satisfy their preferences by relying on networks of financial innovations. By applying the axiological, comparative, and dogmatic methods, the author seeks to examine the relevance of established understandings of the concept of monetary jurisdiction in the circumstances in which information technologies have a direct impact on the understanding of the subject and field of application of monetary legislation in practice and their (in)applicability in a world where technologies create a certain (parallel) order per se, in which according to the author's opinion, the task of monetary law consists precisely in adapting traditional statements about the competence and field of action of central banks to the new digital environment.

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