THE IMPACT OF CRYPTOCURRENCY ON THE SHADOW ECONOMY

Abstract

The article is devoted to the study of cryptocurrency and its impact on the shadow economy. Transactions related to cryptocurrencies are anonymous, so it is very difficult to control them.It is cryptocurrencies that are used in the shadow economy, and this raises the problem of how to control transactions and what laws should be applied to regulate digital currency. The article analyzes the peculiarities of the cryptocurrency market, as well as the peculiarities of peer-to-peer payment systems such as Bitcoin, Namecoin, Litecoin, PPCoin, and Novacoin. The attitude to cryptocurrencies in the world is ambiguous; due to the pseudo-anonymity of cryptocurrencies, their use can be carried out through fraudulent schemes, in particular, financing the shadow sector - terrorism and drug trafficking. The author examines the possible interrelationships between cryptocurrencies and the shadow economy, highlights the main distinctive characteristics of cryptocurrencies and payment schemes using them, and analyzes the pros and cons of having competitive money in the country’s economic cycle.