Legal regulation of cryptocurrencies in Europe: Challenges of harmonisation and development prospects

Abstract

The study aimed to identify key challenges in the field of legislative harmonisation and to outline the prospects for developing cryptocurrencies in the European Union, the United Kingdom and Ukraine. The study used hermeneutical, comparative and historical methods. The study defined crypto asset, its concept and content, in particular, the types into which it is divided (asset-linked token, electronic money token, and service token). The study analysed cryptocurrency regulations in the jurisdictions of the European Union, the United Kingdom, and Ukraine. At the same time, the study addressed the trends and prospects for legal regulation of virtual assets in these countries. The study established that the fragmented regulatory approach applied in the UK has led to uncertainty, which has had a negative impact on innovation and investment in the cryptocurrency sector. The study revealed significant differences in the regulation of cryptocurrencies in different countries, which create substantial obstacles to the harmonisation of legislation and further development of the market. At the same time, there is a general tendency to tighten the regulation of cryptocurrencies to prevent their use for illegal activities, such as money laundering and terrorist financing, and to ensure investor protection. This study emphasises the importance of enacting the Law of Ukraine “On Virtual Services”, which will become the only legal act in Ukraine that will regulate relations in the field of crypto assets