Cryptocurrency: present-day challenges and prospects of development

Economic Annals-ХХI: Volume 176, Issue 3-4, Pages: 49-55

Citation information:
Vozniuk, A., & Tytko, A. (2019). Cryptocurrency: present-day challenges and prospects of development. Economic Annals-XXI, 176(3-4), 49-55. doi: https://doi.org/10.21003/ea.V176-05

Andrii Vozniuk
D.Sc. (Law),
Associate Professor,
Head of the Research Laboratory,
National Academy of Internal Affairs
1 Solomianska Sq., Kyiv, 03035, Ukraine
vaa.999999@gmail.com
ORCID ID: http://orcid.org/0000-0002-3352-5626

Anna Tytko
PhD (Law),
Leading Research Fellow,
National Academy of Internal Affairs
1 Solomianska Sq., Kyiv, 03035, Ukraine
hanna.tytko@gmail.com
ORCID ID: https://orcid.org/0000-0002-5669-2208

Cryptocurrency: present-day challenges and prospects of development

Abstract. Due to digitalisation processes in economic, civic and social areas, we observe acceleration in certain processes, in particular the saturation of the financial market with modern digital means, including cryptocurrencies, which has led to the choice of the subject for the present article.

This article is aimed at the analysis and systematisation of the notion of cryptocurrency on the basis of selected digital and electronic money characteristics, including the determination of its place in the system of market values along with the classification of approaches to the regulation of cryptocurrency flows in European countries. Also this paper provides an individual interpretation of Burniske’s formula to calculate the cryptocurrency monetary supply at global financial markets.

The research stipulates the use of morphological and synthesis, structural and functional, and comparative legal types of analyses, including generalisation.

The paper provides an analysis of the category and concept framework of digital currencies, in particular cryptocurrencies from the standpoint of tools used to develop the crypto infrastructure. The electronic currency as a means of value has certain advantages, if compared to the fiat currency, yet a lack of proper legal mechanism leads to collapse in its functioning in the financial market. It is also established that cryptocurrencies have high volatility resulting in the limitation of its functioning in certain states (Ecuador, Iceland, India, China, etc). The authors reveal characteristics and legal content of Burniske’s formula which justifies the proportional relation between the product of currency flow velocity and gross monetary supply and the product of monetary supply price and circulation volume.

National legislation must identify cryptocurrency as a financial means – an alternative for the unstable banking system and extension of economic rights of individuals and legal entities.

Keywords: Digitalisation; Electronic Currency; Transactions; Digital Currency; Cryptocurrency; Bitcoin

JEL Classification: F30; K30; О10

Acknowledgements and Funding: The authors received no direct funding for this research.

Contribution: The authors contributed equally to this work.

DOI: https://doi.org/10.21003/ea.V176-05

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Received 6.03.2019
Received in revised form 22.03.2019
Accepted 27.03.2019
Available online 20.08.2019