Bitcoin, Altcoins, Digital Ruble: On the Economic Nature of Cryptocurrencies

Abstract

Cryptocurrencies are a type of financial instrument that has been widely used by financial market participants since the early 2010s. Despite their growing popularity, their status within financial systems across different countries remains a topic of ongoing discussion. There is still no consensus on how to best understand the economic nature of these digital assets. This paper uses discourse analysis and content analysis to explore the various interpretations of cryptocurrencies’ economic nature. The paper argues that the interpretation of cryptocurrency’s economic nature depends heavily on the perspective of the stakeholder and the intended purpose of using the term. It considers arguments both for and against treating cryptocurrencies as commodities, currencies (including electronic and private currencies), or properties (assets, such as financial assets). It concludes that traditional cryptocurrencies do not meet the criteria for being considered money, and only central bank-issued digital currencies can fulfill all the functions associated with money. Decentralized cryptocurrencies, such as Bitcoin, cannot be classified as securities because there are no companies or organizations that issue these assets and bear any obligations under them. Instead, these assets have the characteristics of commodities. Different types of cryptocurrencies can be treated as either commodities or securities for tax purposes, depending on the specific circumstances. At the same time, assets with unique characteristics and behavior in the financial market may be included in a separate category for accounting purposes, or if the state allows for the use of cryptocurrencies in transactions without restrictions, they can be considered equivalent to cash.