FINANCIAL AND LEGAL REGULATION OF BLOCKCHANE TECHNOLOGY: STATUS AND PROSPECTS OF CRYPTOVOLUTE USE

Authors

DOI:

https://doi.org/10.18371/fcaptp.v2i37.229698

Keywords:

technology blockchain, cryptocurrency, virtual currency, legal regulation of cryptocurrencies, state functions, cryptocurrencies taxation

Abstract

Abstract. The essence of cryptocurrencies is considered and the definition of their legal status is offered. The experience of some jurisdictions regarding the opportunities and threats of using and regulating cryptocurrencies has been studied. The authors analyzed the cryptocurrency market. The factors that led to the widespread use of cryptocurrency, which include financial instability, significant currency fluctuations, limiting capital flows and inflation of the currency in the country. The problem of information protection using blockchain technology, which is solved by a combination of block design and cryptographic protection, is considered.

The capitalization of TOP cryptocurrencies for the last three years is analyzed, among which the leading ones are Bitcoin (VTS), Ethereum (ETH), Tether (USDT) and others. Identified issues that need to be addressed in the field of finance and legal regulation.

In the process of analyzing the experience of regulating cryptocurrency, we have found similar and distinctive features in some jurisdictions. First, each country, in view of the great potential of the blockchain technology, is trying in one way or another to create a favorable climate for its development. Secondly, the use of cryptocurrency goods is rapidly developing, and their impact on economic processes, both at the international and national levels is increasing, while states are faced with the problem of adapting their tax legislation to the current challenges of the digital economy, since the definition of the status of cryptocurrency does not directly lead to lack of funds to the state budget from operations with these assets. Thirdly, today there are more than 2,000 cryptocurrencies is traded through various trading platforms — stock exchanges and can be used to launder proceeds from crime. Thus, it is necessary to develop common standards for the regulation of cryptocurrency and the requirements for such crypto exchange counterparts, through the licensing of operations with cryptocurrencies. At the same time, the important question is what government bodies should exercise such control.

Keywords: technology blockchain, cryptocurrency, virtual currency, legal regulation of cryptocurrencies, state functions, cryptocurrencies taxation.

JEL classіfіcatіon F01, F20, K33, K34

Formulas: 0; fig.: 0; tabl.: 1; bibl.: 23.

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Published

2021-04-30

How to Cite

Tipanov, V., Drachov, A., Tkalenko, S., Mirzodaieva, T., & Syerova, L. (2021). FINANCIAL AND LEGAL REGULATION OF BLOCKCHANE TECHNOLOGY: STATUS AND PROSPECTS OF CRYPTOVOLUTE USE. Financial and Credit Activity: Problems of Theory and Practice, 2(37), 72–83. https://doi.org/10.18371/fcaptp.v2i37.229698

Issue

Section

The Modern banking. The problems and prospects of development