The Bank of Russia’s Monopoly on Money Issue: Legal Aspects

Abstract

Introduction. This study analyzes the legal means of ensuring the Bank of Russia’s monopoly on money issuance. It is noted that researchers have focused primarily on the distribution of issuing powers between the Bank of Russia and commercial banks. However, there is a second aspect - restrictions on the circulation of foreign currencies and monetary surrogates within Russia. The research objective is to study the nature and logical relationship between the methods of ensuring the Bank of Russia’s domestic and foreign monopoly.Methodology and materials. The purpose of this study is to analyze the current legal regulation of the Bank of Russia’s monopoly on money issuance, identify its shortcomings, and propose ways to address them. The research methodology utilizes general scientific methods (analysis, synthesis, deduction, induction, etc.) and specific legal methods (formal-dogmatic and historical).Research results and discussion. The agency nature of money issuance by commercial banks is substantiated, which allows us to refute the position that the issuing activities of commercial banks contradict the provisions of Part 1 of Article 75 of the Constitution of the Russian Federation. The article also substantiates the position regarding the nature of legal tender, foreign currency, and monetary surrogates. It is proposed to consider them as monetary legal regimes through which the state prevents foreign central banks and private individuals from issuing money in Russia.Conclusions. It is demonstrated that the state, in regulating the Bank of Russia’s monopoly on money issuance, proceeds from the goal of such regulation: creating an economic situation in which only the Bank of Russia can issue money in Russia. To achieve this goal, the legislator simultaneously restricts the right of all national entities to issue the ruble and limits the circulation of foreign and private currencies within Russia. Therefore, the Bank of Russia’s monopoly on money issuance can be understood in two aspects - internal and external, respectively. Distinguishing both aspects allows for the foundation for further research within each.