RECALIBRATING GLOBAL MONETARY POWER: CBDC AS A STRATEGIC RESPONSE TO FINANCIAL WEAPONISATION
Kavya S S, LL.M (Business Law), 2nd Year, Student at The Tamil Nadu Dr. Ambedkar Law University (India)
This paper undertakes a doctrinal legal analysis of the weaponisation of finance and explores the potential of Central Bank Digital Currencies (CBDCs) and other digital monies as tools to mitigate such financial coercion. The weaponisation of finance refers to the strategic use of financial sanctions, currency restrictions, and control over international payment systems by states to achieve geopolitical aims. This phenomenon disrupts global financial stability, raising profound legal and normative questions about sovereignty, economic freedom, and human rights. Employing a doctrinal methodology, the paper critically examines the current legal frameworks governing sanctions law, monetary controls, and international financial regulations, analysing key statutes, treaties, regulatory policies, and case law. Special emphasis is placed on the advent of CBDCs, government-issued digital currencies with programmable capabilities that provide enhanced transparency, traceability, and regulatory oversight. The analysis highlights how CBDCs may serve as legal instruments to curb the Weaponisation of finance by enabling stricter compliance enforcement, enhancing monetary sovereignty, and offering alternatives to dominant global currencies subjected to unilateral sanctions. Concurrently, the paper assesses the risks related to privacy intrusions, potential governmental abuse, and fragmentation in the international monetary system due to competing CBDCs. The study concludes by emphasising the necessity for robust legal safeguards, multilateral regulatory cooperation, and clear central banking mandates to balance the benefits of CBDCs in countering financial weaponisation with protections for privacy and financial freedom. This research contributes to the intersection of international finance law and emerging digital monetary technologies, providing insights crucial for policymakers, legal scholars, and regulators navigating the complexities of finance, sovereignty, and technology in a rapidly evolving global order.
| 📄 Type | 🔍 Information |
|---|---|
| Research Paper | LawFoyer International Journal of Doctrinal Legal Research (LIJDLR), Volume 4, Issue 2, Page 1552–1574. |
| 🔗 Creative Commons | © Copyright |
| This work is licensed under a Creative Commons Attribution-NonCommercial 4.0 International License . | © Authors, 2026. All rights reserved. |