CRYPTOCURRENCY: ESSENCE, FACTORS AND PROBLEMATIC ISSUES

Abstract

Introduction. The significance and relevance of researching the development of the cryptocurrency market are driven by the digitalization of society, its penetration into all areas of life, including the financial sector, the transformation of its regulation, the need to prevent the cryptocurrency market from operating outside the legal framework, and mitigating the negative consequences of cryptocurrency use. The purpose of the article is to clarify the essence of cryptocurrency, identify its determining factors, and explore the key issues in its functioning. Results. Various approaches to interpreting the concept of "cryptocurrency" have been analyzed. The essence of cryptocurrency, its distinctive features, attractiveness, and associated negative processes have been identified. The author's perspective on the nature of cryptocurrency is presented. The patterns and peculiarities of cryptocurrency market regulation in different countries have been characterized, identified the negative consequences of the absence. The importance of financial monitoring in this sector has been emphasized. Conclusions. Despite the advantages and disadvantages of cryptocurrency implementation, it is essential to establish a well-structured regulatory system, clearly define the regulatory authority, determine the issuance process, usage, application areas, and taxation framework; establish the relationship between cryptocurrency and other financial assets; and ensure state oversight of this sector, including the appropriate development and enhancement of financial monitoring mechanisms.