Central Bank Money: Liability, Asset, or Equity of the Nation?

Source: Oxford Business Law Blog

What exactly is central bank money? A Bank of England £10 note is a promise by the bank of England to pay £10—a promise which can only be discharged by the delivery of another £10 note. Is that a debt owed by the Bank of England or not? And if we do not know what is going on here in the physical world, how do we get to grips with what will happen when the £10 note becomes a central bank digital cryptocoin?

In our article ‘Central Bank Money: Liability, Asset, or Equity of the Nation?’,  we address the question as to whether money created by a central bank can properly be regarded as a ‘debt’ owed by that central bank, or of the relevant sovereign. And, if it is not a debt, is it some other kind of legal obligation? If so, what exactly is it?

Read the full post and article by M. Kumhof, J. Grant Allen, W. Bateman, R. M. Lastra, S. Gleeson and S. Omarova here.

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