CENTRAL BANK DIGITAL CURRENCY (CBDC) AND ITS IMPACT ON MONETARY SOVEREIGNTY

AUTHOR – NAVAMI ANILKUMAR, AMITY INSTITUTE OF ADVANCED LEGAL STUDIES, AMITY UNIVERSITY, NOIDA

BEST CITATION – NAVAMI ANILKUMAR, CENTRAL BANK DIGITAL CURRENCY (CBDC) AND ITS IMPACT ON MONETARY SOVEREIGNTY, INDIAN JOURNAL OF LEGAL REVIEW (IJLR), 6 (6) OF 2026, PG. 587-594, APIS – 3920 – 0001 & ISSN – 2583-2344. DOI – https://doi.org/10.65393/IJLRV6I6461

ABSTRACT

The introduction of Central Bank Digital Currency (CBDC) is a game-changer in the world of global money. Given the digital realm reforming monetary systems, central banks are getting keen on CBDCs to offer a state-backed alternative to private digital currencies and payment systems. This paper aims at carrying out a brief analysis of CBDCs and their impact on monetary sovereignty in view of globalization, technological disruption and rising decentralized finance. Central Bank Digital Currencies (CBDCs) hold promise for bolstering the state’s monetary policy. However, they also pose various challenges to the financial stability of states and cross-border payments involving CBDCs. The study also mentions the changing character of the role of central banks such as the Reserve Bank of India and compares international approaches like the digital yuan of China and the digital euro of the European Union. The paper concludes that CBDCs represent an instrument to strengthen monetary sovereignty as well as a catalyst to redefine monetary sovereignty in the digital age.