Decentralised Finance or DeFi has emerged as a transformative and disruptive force within the financial industry, offering innovative financial services powered by blockchain technology and smart contracts. This paper provides in-depth knowledge of DeFi, its evolution, applications, and their adoption. It identifies the opportunities brought about by DeFi, comparing it with the traditional CeFi (Centralized Financial) system, including financial inclusion, transparency, and programmable money. It highlights the potential of applications of DeFi for decentralized lending, decentralized exchanges, and yield farming as innovative and promising avenues within the DeFi space. A SWOT analysis comparing DeFi and CeFi was performed to delve into the strengths, weaknesses, opportunities, and threats associated with DeFi. This study explored the intricate challenges and inherent risks involved in the adoption of DeFi applications, offering insights into the hype, fear, and apprehensions among governments and the masses regarding its adoption. The findings offer a nuanced understanding of the current state of DeFi, providing valuable insights for researchers, policymakers, and industry practitioners.
Hanna Yarovenko, Agnieszka Łopatka, Tetyana Vasilyeva, Imre Vida
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Introduction. Under the modern conditions of the Ukrainian society democratization and the reform of financial decentralization, the problems associated with increasing the effectiveness of the interaction of civil society and public authorities, primarily in the context of the modernization of public finance management in Ukraine, have been significantly updated. Therefore, the development of the methodological foundations of research in the field of public finance with the help of the latest approaches is highly demanded in the current domestic realities. One of such approaches is the application of the main principles and effects of the theory of behavioural finance in justification and interpretation of financial processes and phenomena occurring in the public sector of the national economy, since behaviour of all subjects of the public finance sphere is in the coordinates of political science, psychology, ethics, political science, etc., which is most clearly manifested primarily in the budget process. However, in Ukraine, the specified direction of scientific research needs active development, which determines the relevance of the scientific research topic. The purpose of the article is to substantiate the methodological foundations of research in the field of public finance in Ukraine through the prism of the concept of behavioural finance. Results. The article considers the main aspects of the functioning public finance in Ukraine from the standpoint of behavioural approach. Based on the study of existing points of view, theoretical approach to interpretation of the essence of public finance was formed, the main problems of interaction between citizens and public authorities in the context of public finance management were identified, and directions for their solution were proposed, taking into account the developments of the behavioural finance theory. Conclusions. The identification of key features and the most important problems of public finance functioning in Ukraine, as well as the analysis of the impact of the main effects of behavioural finance (in particular, the “framing effect”, “social influence effect”, “pushing effect”, “conservatism effect”, “trap effect”) made it possible substantiation of vectors for improving public finance management in the context of strengthening interaction between civil society and public authorities in Ukraine.
Ирина Сергеевна Ферова, Svetlana A. Kozlova, Svetlana N. Grib
The paper is devoted to the development of tools for assessing the financial security of a region in order to form a strategy for the territorial development in the context of the interaction between the goals of sustainable socio-economic development and economic security. The paper considers the features of financial security assessment. The assessment was carried out by centralized and decentralized finance of a region. Taking into account the existing limitations of statistical observation at the level of municipalities, the composition of indicators and their threshold values used in assessing the financial security of a region was specified. The measurement was carried out in the context of six macro-districts according to three indicators: the average level of subsidization of local budgets of the macro-district; tax and non-tax revenues of local budgets per capita (coefficient of development of own revenues in local budgets); business efficiency ratio. An analysis of the dynamics and structure of subsidies for the period 2015 – 2020 shows that the main increase in subsidies falls on the Western and Southern macro-districts, the growth rate exceeds the average for the territory over the same period. There is a clear dynamics of development and improvement of the own revenues of local budgets of most macro-districts of the territory. There is a decrease in the business efficiency ratio in general in Krasnoyarsk Territory in 2020, due to the impact of the pandemic and lockdown.
The goal of financial management is to manage the purchase and sale of assets, the rational financing of funds, the management of cash flow in operations, and finally, the reasonable distribution of company profits in a certain task situation, which is simply the management of the "three statements" of the enterprise. The core issue of the financial mechanism is how to choose a centralized or decentralized management model, which requires the company to consider the internal and external environment, and according to the development of the company, the quality of employees and business characteristics of various factors, in order to make the best choice of the company's financial management model. Therefore, in the context of the epidemic, this article conducts research related to the financial management of listed companies based on convolutional neural network models (radial basis neural network, generalized regression neural network, wavelet neural network, and fuzzy neural network). This article, firstly, discusses the basic theories of macro- and micro-financial management of enterprises and financial management of listed enterprises, secondly, examines the overall financial management model of listed enterprises in China through methods such as the convolutional neural network model research method introduced in this article, and then, after an overall examination and analysis of the financial management situation of X-listed enterprises, finds the macro- and micro-status quo of financial management of listed enterprises in China under the epidemic, and in the sub. On the basis of the status quo, suggestions are made to build a financial management model that combines centralization and decentralization and to build a group financial risk management system.
The article examines the nature and main types of fraud based on the classification of the Association of Certified Fraud Experts (ACFE), which proposes the division of fraud into three groups: corruption, fraud in financial reporting and misappropriation of assets. The purpose of the article is to conduct a comparative analysis of economic losses from fraud and provide suggestions for reducing them through the use of blockchain technology. The research methodology is based on the use of Report to the Nation data and the results of other surveys presented on the ACFE website for a comparative analysis of types of economic fraud by volume, period, territorial affiliation and counteraction. Based on a report for the nation prepared by ACFE, it was found that the company's largest monthly losses are caused by fraud with financial statements, which lasts an average of 18 months. The frequency of cases of different types of fraud depending on the industry was analyzed and it was found that the most common companies in each industry are corrupt. The 8 most risky departments with different types of fraud were identified, and it was found that corruption is also the most common in each department. The most common schemes of professional fraud by region were studied, which showed that the most common schemes of professional fraud in all countries are corruption, with the highest level in South Asia. It has been established that tip, internal audit and management review are used to detect company fraud in all regions. A study of the most common means of control against fraud showed that the most effective of them are the External Audit of Financial Statements and the Code of Conduct. It has been established that in most countries of the region the Code of Conduct and the External Audit of Financial Statements are used as anti-fraud tools. It should be noted that a large number of companies use proactive monitoring / analysis of data, of which blockchain technology is an integral part. The main stages of creation and use of blockchain technologies for the financial operations of the company are offered, which will allow more effective control over the fight against fraud.
Every year, the cryptocurrency is more active in the global financial market, offering users more convenient and cheaper terms of payment. In addition, it allows you to receive financial income, makes it more and more competitive in the electronic money market. Over the past decade, it is cryptocurrency that has provided the largest 463 increase in the value of assets and the number of services for the population and business. Accordingly, both accounting and auditing are obliged to meet the challenges of the modern economy. The use of cryptocurrency primarily influences the choice of audit procedures. Since, along with traditional audit procedures, it is important to apply new methods to reduce the risks of inaccurate currency valuation and identify possible fraud. The procedures, along with the validation of reporting figures, should ensure that the business is held accountable to the public for the veracity of transactions. While this is more like cybersecurity, its assessment should also be a major part of the expert audit process. Our study summarized the theory and practice of auditing cryptocurrencytransactions, analyzed the main procedures and proposed our own audit sequence in accordance with the International Standards for Quality Control, Auditing, Reviews, and other assignments. Auditors do not assess the state of cybersecurity, however, they use information, the veracity of which is associated with the risks of unauthorized access to IT systems and data. Therefore, for a cryptocurrency, the state and assessment of the IT system of an enterprise has a direct impact on the indicators of financial statements.
The democratic development of society has shown that the growth of the welfare of the overwhelming majority of the population through the implementation of effective social and economic policy in the country positively influences public attitude to the government and increases the level of trust in the public sector. A successful mechanism to address the social needs of citizens is the development of an affordable housing financing system for the population. The purpose of the study is to analyze the state of affordable housing financing in Ukraine and determine its relationship to trust in the public sector. The article examines the use of state-administrative mechanisms for realizing the housing rights of Ukrainian citizens. Analysis of the current state of implementation of affordable housing programs is proposed, considering the size of mortgage payments and the volume of housing financing. The analysis highlighted the existence of a housing crisis in Ukrainian society as a result of the extremely low level of funding for the sector. The study provides a comparative analysis of the housing affordability index and the level of trust in government in Europe, according to the Global Value Survey. This has helped determine the place of social housing policy in the system of trust relationships between government, local governments and citizens. According to the sociological monitoring platforms, a dynamic analysis of the balance of trust-distrust of the population of Ukraine to the state apparatus and local government bodies was conducted. Based on a comprehensive and critical assessment of the leading affordable housing programs in the country and trust indicators, this study found that the distribution of powers, incentives, responsibilities, and budget funds within the framework of the decentralization process between the central government and local authorities, contribute to the achievement of the main goals of the state's social policy regarding affordable housing, which positively affects the level of citizens trust in local authorities. As a result, it was determined that during periods of economic and political uncertainty, financing of affordable housing is quite important, because due to such actions the state reduces the level of uncertainty, forms positive expectations of citizens, promotes the increase of stability and trust necessary for sustainable economic and social recovery.
Стаття присвячена дослідженню проблематики створення та розвитку децентралізованої фінансової моделі та можливості її використання для кредитування на основі технології криптовалют. Метою статті є дослідження особливостей децентралізованої фінансової моделі для кредитування на основі технології Ethereum. Технологія децентралізованих програм для фінансування (DeFi), що дозволяють перетворювати традиційні фінансові послуги у послуги, які надаються без посередника за допомогою смарт-контрактів на блокчейні, поступово розширює власні можливості. Децентралізація усуває необхідність в довірених третіх сторонах, зменшуючи ринкові можливості посередників, отримані завдяки інформаційній перевазі, яку вони мають у порівнянні з учасниками угоди, використовуючи їх посередницькі послуги. На даний час більшість фінансових послуг DeFi складається з монетарно-банківських послуг; надання платформ однорангової позики; забезпечення вдосконалених фінансових інструментів, таких як децентралізовані біржі, ринки деривативів. Застосування технології блокчейн у фінансовому секторі привело до створення системи, здатної відтворювати стандартні фінансові послуги та пропонувати інноваційні рішення для розвитку цієї галузі. Система блокчейн реалізована Ethereum, саме тому вона є дуже ефективною для системи транзакцій, ніж інші транзакції, оскільки вона має технологічні особливості смарт-контракту, які пов’язані з минулою транзакцією. Пошук подальших варіантів використання децентралізованих фінансів, на основі можливостей блокчейну, має вирішальне значення для створення відкритих фінансових продуктів. У разі успіху система децентралізованих фінансів розширить можливості надання кредитних ресурсів на основі технології Ethereum з покращеними умовами.
Валерія Аркадіївна Динту, В. А. Динту, Валерия Аркадиевна Дынту, Валерия Аркадиевна Дынту · 9 authors
The purpose of the article is to explain the use of cryptocurrency as a terrorist financing tool. This article has emphasized the ways, which terrorists appraise for being a reliable fundraising means and their adoption. Methodology. For the purposes of the study, the methods of scientific abstraction, synthesis, observation, generalization, as well as the method of induction of literature and legal documents were used to determine the features of bitcoin, promoting and preventing its use for terrorism financing. Results. The development of the Internet and electronic devices has radically changed all spheres of human life, including criminal activity. Digitalization has led to the improvement of ordinary crimes and the emergence of new types of crime, which, in principle, cannot exist without special digital electronic devices. Among the first implementers of new technologies were terrorists, who took advantage of digitalization to increase profitability. Thus, terrorists have now significantly increased their attention to cryptocurrency as a digital means of payment, namely Bitcoin. Bitcoin has a number of features that have attracted the attention of criminals as a way to evade responsibility for a crime. In particular, decentralization avoids the need for confirmation by a central authority, and pseudo-anonymity provides a certain level of anonymity. In addition, terrorists are aware that Bitcoin's confidentiality is extremely fragile and needs to be enhanced. The paper analyzes several ways to enhance anonymity, such as software that anonymizes traffic and prevents IP identification, peer-to-peer mixers, centralized mixing services (tumbler), and other approaches. It is worth emphasizing that for the fight against crime, the main issue is the de-anonymization of the Bitcoin owner/user, which allows the identification of the criminal. Currently, law enforcement agencies use direct and indirect de-anonymization, proliferation analysis, quantitative analysis, time analysis, and transactional network analysis, among others, to achieve the above goal, which are discussed in detail in this article. In addition, agencies around the world investigated and uncovered terrorist groups and their financial facilitators. Specifically, on August 13, 2020, the U.S. Department of Justice's Office of Public Affairs announced "the largest cryptocurrency seizure in the context of terrorism in history." To investigate the agenda, the legal documents of those investigations that contain information about the terrorist fund-raising mechanism were examined and analyzed. The legal documents revealed that these investigations used the aforementioned de-anonymization approaches.
This article addresses issues related to recognition, evaluation and reflection in accounting cryptocurrency in accordance with IFRS. Should be noted, that there is currently no specific IFRS standard that would disclose these issues. The article also discusses the debatable issues of recognition in the accounting of crypto-currencies. However, this article discusses the possibility of recognizing cryptocurrency as an asset and the way of application of IFRS for evaluation and recording of the cryptocurrencies. In this situation, it becomes necessary at the regulatory level to consolidate the rules for accounting for cryptocurrencies. This can be done in various ways, for example: to introduce additions to a number of International financial reporting standards, or to elaborate a separate IFRS that would disclose the features of accounting for cryptocurrencies.
The transformation from analogue to digital risk management is becoming a prerequisite in the implementation of the incresingly digital bank institutions’ strategies. Among the key steps in this direction is the optimal use of blockchain technology’s potential and artificial intelligence. Huge hopes are set on blockchain in view of two key risks facing today’s banks: the danger of using the bank system for money laundering and financing terrorism, and cyberattack threat. Artificial intelligence, in turn, creates conditions for processing large arrays of unstructured data risk, more precise identification of potential problems in the future, full automation of manual processes in risk function, credit scoring automation, developing adequate market risk assessment models, etc.
The purpose of the research is to improve the methodological approach to assessing the financial security of the region in the context of decentralization, which, unlike the existing ones, makes it possible to determine the ways of ensuring the financial security of the regions through an integrated assessment of the contribution of individual factors and types of regulation to the final state of the financial security of the territories. Methodology. The methodological approach to the assessment of the financial security of the region under decentralization has been improved based on the application of normalization of the system of indicators and construction of integral indices by the type of impact indicator (exogenous or endogenous) and factors: decentralization, socio-economic status and fiscal policy of the regions. Individual time series have been identified and evaluated for each of these integrated indicators. Results. Based on the research, the methodological approach to the assessment of the financial security of the region under decentralization conditions has been improved, which makes it possible to determine the ways of ensuring the financial security of the regions by assessing the contribution of individual factors and types of regulation to the financial security. These individual contributions are grouped together to reflect the type of impact indicator (exogenous or endogenous) and factors such as decentralization, socio-economic status and fiscal policies of the regions. The categories of integrated indicators proposed in the article are useful for monitoring financial security drivers, making it clear what affects the financial security of a country under decentralization, how systemic events in the process of decentralization affect the financial security of regions over time. Practical meaning. The research identified three groups of regions of Ukraine in terms of their financial security: financially secure regions, which during the entire observation period were ascertained: a high integral financial security index (Dnipropetrovsk, Kyiv regions) and a sufficient integral financial security index (Lviv, Zaporizhzhya, Odesa, Poltava and Kharkiv regions); financially unstable regions where there is a potential for strengthening financial security (Vinnytsia, Donetsk, Kirovohrad, Mykolaiv, Cherkasy regions), but there is also a likelihood of aggravation of a negative financial situation (Ivano-Frankivsk, Zhytomyr, Sumy, Kherson, Khmelnytsky, Chernihiv regions); financially dangerous regions, which are dependent on state support, are not able to independently fulfill the majority of delegated to the local level of authority and to finance the economic development of the region (Volyn, Luhansk, Transcarpathian, Rivne, Ternopil, Chernivtsi regions). Therefore, the advantage of using this system of integrated indicators is that they give the developers of national regional policy and internal regional policy an up-to-date picture of the financial security situation in the region, wider than that provided only by some unsystematic indicators. Prospects for further research. The prospect for further research should be to improve methodological support for the financial security of Ukrainian regions.
The behavior of agents to ensure financial security on the basis of game theory was analyzed, the winning strategy taking into account risk and uncertainty was determined. Using Data Mining the useful functions of this technology were identified to ensure financial security: suspicious transactions determination, credit risks analysis, client account reliability analysis, financial indicators predicting and risks control. A comparison was made of the assessment of the effectiveness of various data mining algorithms on the nature of financial transactions and decision-making procedures in the financial security system. It was proved that the development of information technology has created a whole range of vulnerabilities in the financial system, in particular, has transformed the form of money in modern conditions -the emergence of a cryptocurrency. The influence of the formation and development of cryptocurrency on financial security at all levels of the economy: micro and macro was analyzed.
he article presents the characteristic of the scientific genesis of public risk management in construction in Ukraine, in global and local dimen- sions. The essence of the working organization of risk management in the con- struction and operation of buildings, taking into account the transformational processes in society, is disclosed. On the basis of the analysis of risks in construc- tion and taking into account the current realities, scientifically grounded ap- proaches to the formation of the risk system in the construction and operation of facilities in the system of public administration. It is noted that the risks and crisis phenomena in the construction complex gave a powerful impetus to un- derstanding the causes of the problems of decentralization and finding mecha- nisms for their elimination, in general. The trilateral mission of the state in the conditions of decentralization is the regulation of the macroeconomic role of the construction complex, the mechanism of economic relations of its participants, and ensuring the effectiveness of design decisions in the construction sector, by extending their competences on prevention and risk reduction in the construction industry by the local self-government bodies. To form a state decentraliza- tion policy for construction is required on the basis of knowledge of objective regional macro- and microeconomic investment-construction processes in ci- ties, economic mechanism and indicators of development of investment-build- ing complex and dynamics of social and economic development of regions. The mechanism of the construction complex needs to be improved, using new sources and forms of financing, achieving the balance of the goals of decentralization and its financial support. In addition, taking into account the European integration course of the announced reforms, the European understanding of the essence of risk management in construction during decentralization becomes of paramount importance. Therefore, further research requires the study of the experience of European countries in the implementation of risk management processes in con- struction during the decentralization of power and the analysis of foreign systems of management mechanisms, in the context of their implementation in the na- tional practice of public administration.
As one of the most cutting-edge technologies in Fintech, the application of blockchain has been prevailing across a series of industries. By adopting literature research, this paper analyzes the origin, characteristics and working principle of blockchain. According to the features and requirements of traditional auditing, this paper finds the superiority of blockchain technology, for example, distributed ledger, consensus mechanism and timestamp could facilitate auditing in three ways: (1)improve timeliness of auditing and reduce auditing cost; (2)ensure data integrity and realize automatic auditing; and (3)realize pre-warning and real-time supervision to reduce auditing risk. However, although blockchain has brought unprecedented opportunities to the development and reform of audit industry, the blockchain technology still faces a number of challenges, such as data security, talent and technology support, industry and recognition promotion, and practical application and execution. Concerning these limitations, this paper looks forward to further research field which could contribute to the upcoming improvement of blockchain auditing.
(1) As it is shown in the answering rate itself, concern of top management on the rationalization of business finance is very sincere. (2) As for depreciation system, contraction of depreciation terms and general or partial widening of the rooms for arbitrary depreciation are earnestly desired. (3) Corporate tax has been intensely criticized, and opinion of the majority takes its revision as a premise for financial rationalization. (4) Regarding budget system, opinion of the majority asserts concentrative management, but not a few recognize the necessity of decentralized system. (5) Upon internal audit and concept of cost, a fundamental shift from the traditional idea is fairly evident.