Monetary sovereignty
Monetary sovereignty is the power of the state to exercise exclusive legal control over its currency, broadly defined, by exercise of the following powers:[1]
- Legal tender - the exclusive authority to designate the legal tender forms of payment.
- Issuance and retirement - the exclusive authority to control the issuance and retirement of the legal tender.
Powers and evidence of monetary sovereignty
Legal tender
The state alone is empowered to specify the media, called legal tender, which may be offered and must be accepted for the discharge of any debt.
Issuance and retirement
The state alone is empowered to control, either directly or through institutional and regulatory mechanisms, the issuance and retirement of the legal tender.
Incidence of monetary sovereignty
Currently, nations such as the USA and Japan, which have autonomous central banks and borrow in their own currencies are said to exercise a high degree of monetary sovereignty. On the other hand, the European Union nations, have ceded much of their monetary sovereignty to the European Central Bank.[2]
See also
References
- ↑ "The Legal Aspect of Money" by F.A. Mann, 5th edition, Oxford, 1992, pp. 460-78
- ↑ Cohen, Benjamin J. (2000). The Geography of Money. Cornell University Press. pp. 47ff. ISBN 978-0801485138.