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Volume 43 - Issue 3


Disciplining CBDCs: Achieving the Balance between Privacy Protection and Central Bank Independence

Tsang, Cheng-Yun,Yang, Yueh-Ping,Chen, Ping-Kuei | May 1, 2023

Central bank digital currency (“CBDC”) is a crucial FinTech development that aspires to overhaul the current payment system. In the wake of the COVID-19 pandemic, CBDCs’ promises to reduce personal contact, facilitate socially desirable use of money, and initiate more targeted monetary measures have increased their popularity. In addition, CBDCs can potentially serve as a tool to internationalize a sovereign’s currency. World central banks, thus, have gradually formulated a consensus on structuring CBDCs, leaving the regulatory aspects of CBDCs deserving more attention. Among the regulatory issues related to CBDCs, observers often mentioned their association with privacy concerns, but comprehensive studies on this aspect of CBDCs remain limited. In this paper, we discuss the privacy concerns associated with CBDCs and attempt to introduce discipline upon CBDCs and their issuing central banks. We first demonstrate the privacy implications of CBDCs and highlight the risks that issuing sovereigns misuse CBDCs to serve their agendas. We then discuss, in a domestic context, several architectural designs proclaimed to address CBDCs’ privacy concerns and propose further disciplinary mechanisms that may credibly enforce privacy protection laws against issuing central banks and other governmental authorities. We finally highlight the extraterritorial character of modern privacy laws, which allows foreign privacy protection regulators to discipline the CBDCs of other sovereigns. Through this analysis, we argue that applying modern privacy laws with proper supporting mechanisms may effectively discipline CBDCs and their issuing central banks.

Trends in China-Africa Economic Relations and Dispute Settlement

Kidane, Won | May 1, 2023

The rapid rise in the last two decades of China-Africa economic interactions in trade, investment, construction projects, and loans require sustained inquiry into the substantive rules of engagement and mechanisms of dispute settlement. Evidently, however, it would quickly emerge that the improvements in supranational legal frameworks have not kept pace with the growing scale and complexity of the economic interactions. While trade relations between China and Africa are theoretically subject to the same multilateral World Trade Organization (WTO) rules, they are in practice mostly based on informal unilateral concessions. Moreover, investment relations are partially governed by fragmented and mostly outdated bilateral investment treaties (BITs), and commercial relations are formalized by ad hoc contractual instruments of diverse origin and deployment. Because these economic relations are often orchestrated through confidential and fragmented micro-level contractual instruments unsupported by larger institutional frameworks, two important questions need to be asked: (1) whether the lack of durable legal and institutional commitment is a function of socio-cultural factors, diminished optimism, politics, or just outright pragmatism; (2) whether the contracts-based economic legal ordering that relies on existing rules and institutions is optimal and durable. This article attempts to answer these and related questions.