I. THE THREE THEORIES IN SPANISH LEGAL DOCTRINE

Spanish scholars (García Pelayo, Martín-Retortillo, Jiménez de Parga) identify three competing theories:

1. State Theory (Chartal Theory - Knapp) - Dominant in Spain
Money is a creature of the State (creatura legis). Value comes from State imposing it as means to pay taxes and debts. This is supported by:

• Article 149.1.11 CE: "Bases of the ordering of credit, banking and insurance" - exclusive State competence.
• Article 149.1.10 CE: Foreign trade and monetary system abroad.
• Article 149.1.13 CE: Bases of general economic planning.
• Article 135 CE (reformed 2011): Budgetary stability and debt limits in euros.

Under this theory, money is public sovereignty.

2. Social / Institutional Theory
Money is social trust, not just State decree. Supported by Art 38 CE (free enterprise and market economy) and Art 51 CE (consumer protection). Market accepts what State declares, but State cannot force acceptance if trust collapses.

3. Functional Theory (EU Integrated)
Since 1998, money is supranational function transferred under Art 93 CE. Euro is not Spanish money, but European money managed by ECB.

Spain follows a mixed theory: State declares legal tender (chartal), but its value and issuance is now European (functional).

II. CONSTITUTIONAL TEXT - Where is Money?

A. Explicit References:

Art 149.1.11 CE is the main monetary article: State has exclusive competence on "Sistema monetario: divisas, cambio y convertibilidad; bases de la ordenación del crédito, banca y seguros". This is interpreted by TC as including:

• Definition of legal tender
• Issuance of banknotes and coins
• Monetary policy bases
• Exchange rate regime

Art 93 CE: Allows transfer of monetary sovereignty to EU. This was the legal basis for Maastricht Treaty 1992 and Law 10/1998? Actually Organic Law 10/1992 authorizing Maastricht.

Art 135 CE: All references to debt and deficit are in euros. Implicitly constitutionalizes euro as unit of account. State and Autonomous Communities must have authorization to issue public debt - debt is money creation.

Art 133 CE: "Original power to establish taxes belongs exclusively to State by law." Taxes must be paid in legal tender - indirect definition of money as tax-driven.

B. Implicit References:

• Art 38 CE: Free enterprise in market economy presupposes stable money.
• Art 40 CE: Public powers shall promote favorable conditions for economic progress - interpreted as monetary stability mandate.
• Art 97 CE: Government directs monetary policy before transfer to ECB.

III. LEGAL NATURE OF MONEY IN SPANISH LAW - What IS Money?

Spanish law distinguishes 4 concepts, all constitutional:

1. Money as Legal Tender (Curso Legal) - Art 3 Law 46/1998

"Euro banknotes and coins are legal tender with liberatory power."

You MUST accept them to extinguish a debt (Art 1170 Civil Code). Refusal is unconstitutional under Art 9.3 (legal certainty).

2. Money as Unit of Account - Nominalism Principle
Spanish law follows nominalism: Debt of 100 euros remains 100 euros even if inflation.

Case: Tribunal Supremo, Civil Chamber, STS 12 June 1984, STS 20 July 2005:

"El principio nominalista es principio general del Derecho español en materia monetaria - la deuda de dinero se paga con el valor nominal en el momento del pago, salvo cláusula de estabilización válida."

This was constitutionalized: TC held nominalism is part of Art 9.3 legal certainty and Art 149.1.11 unity.

Exception: Cláusula de estabilización allowed under Art 1255 CC, but must respect Art 135.

3. Money as Public Good - No Private Money Allowed
You cannot create own legal tender.

Case: Audiencia Nacional and Supreme Court on Local Currencies (2018-2020):
Several municipalities (Bristol pound style) created local currencies (Puma in Seville, Eusko in Basque). Banco de España report and STS 2020 Contentious-Administrative: Local currencies cannot have curso legal, only can be "discount vouchers" convertible to euros. Only State (now ECB) can create money with liberatory power under Art 149.1.11.

4. Money as Scriptural (Bank Deposits) - Constitutional Controversy
Is bank deposit money? Spanish doctrine says YES under Art 149.1.11.

STC 49/1988 and STC 62/1983 (Cajas): Deposits are part of credit ordering, State can regulate their guarantee. This led to Real Decreto-Law 16/2011 creating Fondo de Garantía de Depósitos - 100,000€ guarantee. This guarantee is considered part of constitutional right to property under Art 33 CE.

IV. FROM PESETA TO EURO - Constitutional Mutation

This is the core constitutional case.

Law 46/1998, 17 December, on Introduction of Euro:
Peseta ceased to be legal tender on 28 Feb 2002.

Constitutional question: Did Spain need constitutional reform to abandon peseta? TC said NO.

TC Declaration 1/1992 (Maastricht) and TC Declaration 1/2004 (EU Constitution):
TC held Art 93 allows transfer of monetary sovereignty. No need to amend Art 149.1.11. Monetary sovereignty is exercisable competence, not essential nucleus of Constitution. Transfer to ECB is valid if it respects Art 1.1 (Social and Democratic State) and Art 135 (stability).

STC 26/2014, STC 215/2014, STC 44/2015 (ESM Treaty and Fiscal Compact):
Challenges to European Stability Mechanism and to Art 135 reform. Appellants argued transfer of monetary power to ESM violates Art 1.2 sovereignty and Art 135 budgetary autonomy.

TC dismissed:

"Monetary sovereignty is not unlimited. Art 93 allows limitation, Art 135 presupposes integration in Eurozone. ESM is compatible because it pursues financial stability, which is part of general interest under Art 128 and 40."

Doctrine of Counter-limits (contrapesos): TC reserves right to review if EU monetary policy violates essential content of Art 24 (effective judicial protection), Art 33 (property), Art 14 (equality). Not used yet against ECB.

V. LEADING CASE LAW ON MONEY

1. Rumasa - STC 166/1986 and STC 111/1983, 20 July - Money and Expropriation

Government expropriated Rumasa Group (which owned 18 banks) by Royal Decree-Law 2/1983 for financial stability. Shareholders argued violation of Art 33.3 (no expropriation without compensation) and Art 38.

TC: Financial stability is general interest under Art 128 that justifies expropriation of banks. Compensation need not be full market value when banks are insolvent - accounting value of shares after losses can be zero. Money (bank shares) is property, but its content is delimited by public regulation under Art 149.1.11.

This is foundation for all bank resolutions - money as property is limited by systemic risk.

2. Devaluation Cases - STC 155/1993, STC 76/1990

After peseta devaluations 1992-1993, depositors sued State claiming devaluation violated Art 33 (property) because savings lost value.

STC 155/1993: TC rejected. Nominalist principle is constitutional. State has discretion under Art 97, 149.1.11, 149.1.13 to devalue for general economic interest. Right to property under Art 33 does NOT guarantee purchasing power, only nominal amount. No right to stable money as fundamental right, only as guiding principle under Art 40.

This is crucial theory: Spain does NOT have constitutional right to stable money, only to legal tender.

3. Legal Tender and Freedom to Contract - STS Civil 2013, 2015

Supreme】 Court STS 29/04/2015 - Bitcoin first case:
Is Bitcoin money? Supreme Court (Criminal Chamber 326/2019) held: Bitcoin is NOT money under Art 149.1.11, is intangible asset. Cannot be legal tender. Only euro has liberatory power under Law 46/1998.

Therefore, contractual clause "payable in Bitcoin" is valid under Art 1255 CC (freedom of contract) but if debtor does not pay, creditor cannot force specific performance in Bitcoin, only conversion to euros. Because Art 1170 CC says debts of money must be paid in legal tender unless otherwise agreed.

4. Negative Interest Rates - Constitutional?

Case: Audiencia Provincial Barcelona 2021, Juzgado Mercantil Madrid 2022 - Clause IRPH, Negative Euribor:

Banks argued they can keep floor at 0% even if Euribor negative. Consumers argued violates Art 51 CE (consumer protection) + Art 9.3 (no unjust enrichment).

STS 241/2013 and STS 669/2017: Clause that prevents negative rate from benefiting borrower is abusive under Art 82 TRLGDCU if not transparent. Constitutional basis: Art 51 requires transparency in financial contracts where money is not neutral - bank cannot retain monetary policy benefit while transferring cost.

Tribunal Constitucional STC 148/2016: Confirms Art 51 has quasi-fundamental status when money contracts affect housing (Art 47 right to housing).

5. Public Money Creation - Art 135 and Debt

STC 134/2011 and STC 62/2001:
State can set budgetary ceilings for Autonomous Communities and prohibit them from issuing debt instruments that function as money ( pagarés autonómicos as quasi-money). Based on Art 149.1.11 + 149.1.14 (General Treasury) + Art 135.

This is why Catalan "bonos patrimoniales" 2012 were declared unconstitutional if they circulate as means of payment.

VI. CURRENT CONSTITUTIONAL THEORY 2024-2026 - Digital Euro

Most debated question: Is digital euro money under Spanish Constitution?

Legal Position per Banco de España and ECB Proposal COM(2023) 369:

• Physical euro: Banknote is legal tender under Art 128 TFEU, Law 46/1998.
• Digital euro: Would be legal tender under EU Regulation, directly applicable via Art 93.

Constitutional Issues Raised in Consejo de Estado Dictamen 2024:

Does Art 33.3 require compensation if physical cash is abolished? NO - because digital euro is still money with same nominal value (nominalism), only form changes.

Does mandatory acceptance of digital euro violate Art 18.4 (right to data protection) because all payments traceable? Must pass proportionality test under STC 292/2000.

Can Spain refuse digital euro under Art 149.1.11? NO - once ECB issues, Art 93 gives primacy.

Conclusion of Spanish doctrine (García Pelayo, Bilbao):

Money in Spain has 3 constitutional layers:

1. Sovereign layer (Art 149.1.11): Only State/EU can define what is money with liberatory power.
2. Social layer (Art 128, 40, 51): Money must serve general interest, stability, consumer protection. No right to stable value, but right to transparent monetary contracts.
3. European layer (Art 93 + 135): Since 1999, substance of money (issuance, monetary policy, value) is European, not Spanish. Spanish Constitution only controls its use as tax and debt instrument.