Play Money? Contemporary Perspectives on Monetary Sovereignty

Abstract

Money has always been a difficult and complex concept and the views about what money actually is could hardly be more diverse. This is all the more true in the times of completely manipulated irredeemable paper currencies, the functioning of which is based almost completely on the extent to which people believe in its trustworthiness. The final abolition of Gold as a universal standard of currencies in the early 1970s at first glance seems to have strengthened the grip of governments on money. Nevertheless, it is often argued that ‘national currencies’ are under threat. According to this view, ‘monetary sovereignty’ is waning, as is sovereignty as a whole. The present paper takes a different view. It argues that ‘monetary sovereignty’ understood as a legal concept remains intact and is not even significantly limited by obligations under public international law. This leaves governments significant leeway in taking decisions regarding the setup of their monetary regime (‘sovereignty games’) and empirical evidence shows the large number of different options that are actually chosen.