This article examines the challenges that blockchain-based digital currencies pose to state monetary sovereignty in the digital era. As technological advancements transform monetary systems, decentralized peer-to-peer transactions threaten to erode state control over monetary policy. We distinguish between wholesale and retail central bank digital currencies (CBDCs), assessing their respective roles in mitigating sovereignty risks. While wholesale CBDCs reinforce traditional monetary authority, retail CBDCs redefine sovereignty by countering the rise of decentralized crypto-assets and foreign CBDCs. We argue for a dual-CBDC system that integrates both models, with a particular emphasis on an indirect retail CBDC framework to enhance financial stability, ensure public accountability, and foster innovation.
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- Monetary sovereignty in the digital age: the role of Central bank digital currencies
- Jack BuchanMurat Ungor
- International journal of political economy
- Economics
- Taylor & Francis
- 11/02/2026
- Copyright © The Author(s) 2026. This work was first published in International Journal of Political Economy (Taylor & Francis). This is an open access article distributed under the terms of the Creative Commons Attribution 4.0 International License (http://www.creativecommons.org/licenses/by/4.0/), which permits unrestricted use, sharing, adaptation, distribution and reproduction in any medium or format, provided that the original work is properly attributed to the creator(s) and the source, a link to the Creative Commons license is provided, and any changes made are indicated.
- English
- Journal article