Monetary sovereignty

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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[edit]

Legal tender[edit]

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[edit]

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[edit]

Currently, nations such as the USA and Japan, which have autonomous central banks are said to exercise a high degree of monetary sovereignty. On the other hand, the European Union nations within the Eurozone, have ceded much of their monetary sovereignty to the European Central Bank.[2]


  1. ^ "The Legal Aspect of Money" by F.A. Mann, 5th edition, Oxford, 1992, pp. 460-78
  2. ^ Cohen, Benjamin J. (2000). The Geography of Money. Cornell University Press. pp. 47ff. ISBN 978-0801485138.