Cryptocurrency and blockchain-technology in digital economy: development genesis

Digital economy: theory and practice

Different types of electronic money as a possible alternative to the existing money have only appeared recently; this has been attracting considerable attention from not only economists but also ordinary citizens who are active users of modern financial services in the global Internet. Studying the nature of cryptocurrencies and the model of institutionalized regulation in foreign countries will allow to understand this phenomenon in more detail with the subsequent goal of creating and developing a digital economy and ensuring financial and economic safety in the modern world and the national financial systems. The emergence of cryptocurrencies is one of the key reasons of the growing demand for global social economic changes due to the modern information and telecommunication technologies actively developing in different spheres of modern life (or, to put it in less radical terms, a complex of institutional reforms). The citizens’ level of trust towards the state decreases worldwide, with the decrease rates depending on the region. The most progressive part of society is in favor of replacing the state with a group of service companies competing against each other. In view of this, not only the so-called public contract, but also the entire international institutional and legal system are facing serious changes. However, decentralized systems are one of the key tools to implementing these evolutionary changes. This study has considered the main milestones in the development of cryptocurrencies. The economic essence of digital (fiat) money and cryptocurrencies is analyzed, a comparative characteristic is given. The features of state regulation of cryptocurrencies in Australia are studied. The analysis of legal regulation in Great Britain is carried out. The experience of state regulation in the European Union is studied. The main stages of development of state regulation in China, the USA and Ukraine are investigated. The measures of legal regulation in the USA are considered. The stages of development of the relations between the Bitcoin community and the supervisory authority of Ukraine represented by the National Bank of Ukraine are analyzed in the context of legal regulation. The main initiatives and proposals of legal regulation of cryptocurrencies in the Russian Federation are studied in detail. Additionally, we have carried out a SWOT analysis of cryptocurrencies based on the conducted research. We have described the specifics of safely using cryptocurrencies (from FATF’s standpoint). We have considered the algorithm of the schematic diagram for ensuring financial and economic safety by institutional measures while using the blockchain technology. We have hypothesized that the inertia of the money mass depends on the economy. Studying the regulation of cryptocurrencies in foreign countries, we have found certain similarities. Firstly, each country seeks to create a favorable climate for the development of the latest digital technologies (blockchain) and sees the high potential of using technologies in the private as well as in the public sector. Secondly, the market of cryptocurrencies is growing at high rates and the state, and by failing to adapt the tax code to the challenges of modern digital economy, the state’s budget receives less income as cryptocurrencies are out of legal jurisdiction. Thirdly, more than a thousand of various cryptocurrencies exist today, therefore, it is necessary to develop uniform standards of regulation of cryptocurrencies. We have shown that the majority of the countries have declared the creation of the national cryptocurrency, with two parallel scenarios ensuing: on the one hand, it is necessary to regulate the circulation of the cryptocurrencies emitted earlier and to identify them as «digital goods / tool» within the legal framework; on the other hand, it is necessary to discover and investigate the advantages of simulating national cryptocurrencies. Based on the evolution of cryptocurrencies and blockchain, we have analyzed the problems of the formation of digital economy, and have outlined the directions for further research.