The subject of the research is theoretical approaches to the formation and development of the cryptocurrency market and its integration into the national financial system. The purpose of the article is to determine the theoretical foundations of the functioning of the cryptocurrency market based on a systemic approach and to explore the possibilities of its integration into the financial system of Ukraine. Method or methodology of research. The article uses the methods of scientific abstraction, analysis and synthesis, generalization, systematic approach. Results of the article. The article examines the theoretical aspects of the economic category "cryptocurrency". A retrospective analysis of cryptographic money research was carried out. The largest cryptocurrencies by capitalization were studied and it was concluded that Bitcoin remains the leader in terms of price and level of capitalization among existing cryptocurrencies. The state of introduction and development of the cryptocurrency market in Ukraine is considered. In particular, the article presents Ukrainian companies that offer the purchase of their goods and services for cryptocurrency. The prospects for the use of cryptocurrencies in the financial system of Ukraine are outlined. Field of application of results. The results of the research can be used in the process of streamlining the legal framework regulating the circulation of virtual assets and electronic money. Conclusions. A significant potential for the development of the cryptocurrency market is seen in Ukraine. Currently, the issue of implementation, full legal and institutional support for the circulation of cryptocurrencies is open and relevant, but has certain inhibitions, which are caused by an objective factor – the war in the country.
Abhijit Dutta, Райгүл Досжан, A. Дутта, Р.Р. Досжан
In the era of digitalization, innovation in the field of financial technology is inevitable. Natural disasters quite often open up the door for innovation, Covid pandemic has done the same in the field of technology in financial markets and emerged as potential disruptive financial digital asset. Non-fungible tokens which are unique digital assets can be bought, sold, displayed, gifted, or even destroyed just like personal property. In last couple of years emerging NFTs have received investors’ attention as an alternative digital asset for investment and trading. NFTs have recently exploded far beyond their initial large successes and gained popularity across the world. In financial world any asset exhibiting exponential growth in volumes and price may pose risk to the market as potential bubble if such rapid rise is volume/price is not supported by fundamentals. Previous research on this subject has primarily focused on price/volume relationship, adaptation as safe heaven asset etc. but has failed or done very little to demonstrate its future prospects in financial market or a threat as a bubble. In the article we discussed the nascent fintech innovation – non-fungible tokens in terms of its future prospect. Literature on NFTs and other digital assets were studies, discussions with professional investors/traders were made and various articles on Reuters and Bloomberg were picked for qualitative assessment of this subject. Contrary to what has been researched so far by other scholars, study exposed some constraints for NFTs to become a perfect disruptive digital asset. This paper highlighted all the fundamental concerns associated with NFTs along with its resolutions. В эпоху цифровизации инновации в сфере финансовых технологий неизбежны. Стихийные бедствия довольно часто открывают двери для инноваций, пандемия Covid сделала то же самое в области технологий на финансовых рынках и финансовые технологии стали потенциально разрушительными финансовыми цифровыми активами. Не взаимозаменяемые токены, которые являются уникальными цифровыми активами, можно покупать, продавать, отображать, дарить или даже уничтожать, как личную собственность. За последние пару лет новые NFT привлекли внимание инвесторов как альтернативный цифровой актив для инвестиций и торговли. В последнее время NFT значительно превзошли свои первоначальные успехи и завоевали популярность во всем мире. В финансовом мире любой актив, демонстрирующий экспоненциальный рост объемов и цены, может представлять риск для рынка как потенциальный пузырь, если такой быстрый рост объема/цены не поддерживается фундаментальными факторами. Предыдущие исследования по этому вопросу в основном были сосредоточены на соотношении цена/объем, адаптации в качестве безопасного актива и т. д., но не смогли или сделали очень мало, чтобы продемонстрировать его будущие перспективы на финансовом рынке или угрозу в виде пузыря. В статье мы обсудили зарождающуюся инновацию в области финтеха – невзаимозаменяемые токены с точки зрения ее будущей перспективы. Была изучена литература по NFT и другим цифровым активам, проведены обсуждения с экспертами-инвесторами/трейдерами, а для качественной оценки этого предмета были выбраны различные статьи на Reuters и Bloomberg. Вопреки тому, что до сих пор исследовали другие ученые, исследование выявило некоторые ограничения, препятствующие тому, чтобы NFT стали идеальным прорывным цифровым активом. В этом документе освещены все фундаментальные проблемы, связанные с NFT, а также его резолюции.
Oleksandr Melnychenko, Оксана Сергіївна Новак, Олена Фоміна
The article is devoted to the problems of taxation of transactions with cryptocurrencies. Disagreements in the interpretation of the essence of cryptocurrencies in the recommendations of the regulators were revealed, which leads to the lack of a reasonable approach to the reflection of such transactions in accounting and the subsequent determination of the tax base. The current legislation and explanations of tax authorities regarding the declaration and taxation of transactions with cryptocurrencies were analyzed and the absence of special rules regarding the taxation of such transactions was found. The general principles of taxation of operations with cryptocurrencies are characterized by a significant tax burden on such operations, which, in conditions of anonymity of cryptowallet owners, leads to concealment of such operations and avoidance of their taxation. The draft laws on regulation of circulation and taxation of transactions with cryptocurrencies were analyzed, the advantages of which compared to the current legislation are a reduction in the rates of taxation of such transactions by personal income tax and income tax; VAT exemption. In order to ensure the possibility of state control of transactions with cryptocurrencies in matters of taxation and financial monitoring, it is proposed to include cryptocurrency exchanges in the list of subjects of primary financial monitoring.
ЦИФРОВІЗАЦІЯ ФІНАНСОВОГО СЕКТОРА: ІНСТИТУЦІЙНІ ЗМІНИ Й ПЕРСПЕКТИВИЦифровізація формує ексклюзивні виклики і можливості.Сьогодні «бути цифровим» є необхідністю професійної й побутової компетенції, це вже не довільна опція.Цифровізація стала каталізатором змін економіки, інвестиційної поведінки людей як норма і форма міжособистісного спілкування.Конкуренція на міждержавному та корпоративному рівнях постійно потребує використання технологічних інформаційно-сервісних новацій.У розрізі секторів економіки передові цифрові технології знаходяться у фінансовому секторі, в космічній сфері та в сфері гонки цифрових озброєнь.До них дотичним є виробництво товарів подвійного призначення (військово-цивільного, літакобудування, наприклад).У фінансовому секторі криптовалютні ринки стали фокусом цифровізації.Це проявилось у швидкому інструментально-цифровому розширенні заощаджувальнорозрахункових можливостей приватної інвестиційної діяльності.Цифрові фінансові активи, такі як державні (CeFi -Centralized Finance) та децентралізовані (DeFi -Decentralized Finance), забезпечують операційну свободу вільного перетоку капіталу.Нова фінансова картина світу зародилася з появою в обігу децентралізованих криптовалют, коли поряд із традиційними видами валют з'явилися «нові гроші».Це приватні ініціативи майнінгу (не емісії) монет на основі блокчейну, які нерегульовані, нехеджовані з наступною фрагментацією спекулятивного грошового обігу, що спекулятивно забезпечує (допоки) «абсурдний дохід».Особиста свобода через криптовалютні фонтани її фінансування виявилась доступною для вдалих ентузіастів, але і двосічна як кураж фінансових спекуляцій.Більшість активів сектора DeFi -це лише продуковані частини програмного забезпечення, що мають вартість у межах початкових витрат енергії та супутніх елементів на їх майнінг.Тому приватні криптовалюти мають спекулятивну ціну, але практично не мають накопичуваної від початку і поновлюваної вартості.Центробанки країн світу дотепер виявляють зрозумілу стурбованість обігом нових замінників грошей як єдині емісійні центри фіатних валют.Позиція міжнародних фінансових організацій є аналогічною, застереження щодо «недостатнього тестування» приватних криптовалют в якості національних досить акцентовані.При необхідності модернізації грошового обігу центробанки запустили проєкти підготовки емісії власних цифрових валют (СВDC -Central Bank Digital Currency).Кількість проєктів СВDC наразі (осінь 2023 р.) реалізується у понад 100 країнах у різних формах (запуск систем, пілотний етап, дослідження).СВDC є основою цифрового сектора централізованих фінансів -CeFi.Оскільки пропорції між перевагами і ризиками цифровізації постійно мінливі, у цифровізованому грошовому обігу виникає дилема CeFivs -DeFi.Нові тренди управління капіталом в умовах цифровізації визначили два аспекти: а) зростаючу інституційну роль центробанків разом з іншими регуляторами
Мета дипломної роботи - розробка та реалізація нейромережного алгоритму прогнозування курсу Bitcoin з метою покращення точності прогнозів та надання цінних інструментів для трейдерів та інвесторів. Предмет дослідження : нейромережні моделі та їх застосування в прогнозуванні фінансових ринків, зокрема курсу криптовалюти Bitcoin. Об'єкт дослідження : процес прогнозування курсу криптовалюти Bitcoin з використанням нейромережних моделей та аналізу вхідних даних, таких як цінові показники, обсяги торгів та інші фактори, що можуть впливати на ціну криптовалюти. У випускній кваліфікаційній роботі досліджено питання прогнозування курсу криптовалют, створено нейромережний застосунок із використанням моделі LSTM. Ключові слова: блокчейн, криптовалюта, біткоїн, рекурентна нейронна мережа, LSTM.
Introduction. The development of information technologies led to the emergence of new financial instruments, payment systems, methods and payment platforms. Cryptocurrency is a means of circulation and payments fundamentally different from traditional ones. Awareness of the emergence and existence of electronic money is quite high, however, awareness of the mechanism of its functioning and the possibility of using/making calculations, financing projects is low. The puppose of the article is to highlight the main characteristic features of cryptocurrencies, to justify the advantages and disadvantages of cryptocurrencies, to analyze the state, dynamics and development prospects of the cryptocurrency market. Results. Characteristic features of cryptocurrencies include: lack of payment system administration; impossibility of forced return, withdrawal or "freezing" of payments (without access to the owner's private key). Cryptocurrency is an investment object, and the speculative-investor type of demand for cryptocurrencies is also noted. The authors identified the advantages of using cryptocurrencies, including: equal conditions of use by users, unlimited possibilities of transactions, their transparency, lack of complications in international transfers and the impossibility of blocking or freezing a cryptocurrency wallet and its funds, no commission, open code of cryptocurrency, decentralization. Among the disadvantages of cryptocurrencies are identified: the danger of losing the key to cryptocurrency; the difficulty of returning funds in case of erroneous currency transfer; lack of guarantees for keeping electronic wallets; intervention by hackers; instability of the cryptocurrency exchange rate, dependence of the exchange rate on demand; high energy consumption; distrust of users. The dynamics of the exchange rate of bitcoin and ethereum were analyzed, significant fluctuations in their exchange rate relative to the dollar during the research period were noted. The difference in the views of countries on the issue of regulating the circulation of cryptocurrencies is described (recognition of operations with cryptocurrency as illegal activity, full / partial ban, legalization of legal circulation of electronic money). Conclusions. Barriers and prospects for the development of the electronic money market have been identified. Given the described features of cryptocurrencies, the prospects of recognition / settlement of cryptocurrencies as a financial instrument at the same level as freely convertible currencies (dollar, euro, etc.) are unrealistic and impractical within the framework of the existing mechanisms of functioning of the cryptocurrency market. The prospects for the growth of cryptocurrency circulation in the sectors of NFT-tokens (in games, music, art, sports) were noted.
The deepening of digital transformations and the development of digital platforms is the basis of the functioning of decentralized financial markets, the research of the methodological and methodical foundations of their formation and development based on the use of the innovative potential of Web 3.0 technologies has important scientific and practical value. The purpose of the article is to clarify the functioning mechanisms of decentralized markets based on Web 3.0 and to determine their impact on economic and social processes, which is based on the use of general economic and specific scientific research methods. In the process of research, the peculiarities of the functioning of decentralized financial markets are determined and it was proved that the transition to new Internet usage patterns is the main factor in accelerating digital transformations, on the basis of which the Web 3.0 digital platform is being formed. A structural and logical diagram of the functioning of the Web 3.0 platform has been developed, which reflects an organic combination of tasks, functions, used tools and technologies. The main functions of the Web 3.0 digital platform include decentralization of management, customer orientation, interoperability, transparency and ensuring effective management of digital risks, and the main tasks include accelerating the development of the economy and improving the management of economic and social systems. It has been proven that in the future, the development of the Web 3.0 digital platform and the integration of the innovative potential of decentralized markets, distributed ledger technologies, smart contracts and digital assets will become the basis for the formation of a fundamentally new model of the functioning of the digital space - a meta-universe that unites the real and virtual worlds, ensuring the acceleration economic growth and positive socio-cultural changes. The practical value of the obtained results lies in the justification of the prospects for using the Web 3.0 platform and the adaptation of its interoperability, as well as in determining the directions for improving the functioning mechanisms of the Web 3.0 platform, which includes institutional support for the development of decentralized financial markets and of new mechanisms of their regulation and management in order to protect all participants of decentralized ecosystems from cyber threats and digital risks.
The article analyzes the rating of Ukraine according to the Global Cryptocurrency Adoption Index. It is noted that out of the TOP-20 countries in the rating, there are ten countries with below-average income, eight countries with above-average income and two countries with high income. This trend demonstrates the dominance of developing markets. The dynamics of the bitcoin and USD exchange rate are analyzed. Forecasting of the bitcoin exchange rate was carried out using the exponential smoothing method, because this method showed the smallest mean absolute error. The forecast results show the growth of the bitcoin rate. The interdependence between exchange rate of bitcoin cryptocurrency and pairs of the most influential world currencies, world prices for precious metals and securities rates on the largest stock exchanges is determined using correlation-regression analysis. The advantages of using cryptocurrencies have been identified, including high speed of transactions, reduction of the number of intermediaries and low fees. Also defined the threatening nature of the development of the crypto-industry for the economic potential of the state, taking into accountavailable withcurrent global challenges such as cyber-attacks and fraud and data theft. Real fraud schemes in the field of cryptocirculation are considered. The main challenges to the functioning of the cryptocurrency industry are analyzed, including volatility, uncertainty, risk of loss, insecurity of owners, lack of guarantees, large number of cryptocurrencies, technical risk, fraud and data theft. It is noted that without determining the clear legal status of cryptocurrencies in the country, it is impossible to resolve the legal, accounting and tax consequences of these transactions. It was determined that for the legal circulation of cryptocurrencies, the creation of a financial institution or a special state body, which should exercise control over the circulation of cryptocurrencies, must be ensured as a minimum; introduction of taxation for companies whose activities are related to the crypto industry; establishing the obligation of users to declare their income and profits from income regarding crypto-assets in the national currency, etc.
A one-sided understanding of cryptocurrency in terms of the technical model of its functioning does not allow to reveal its essence from the point of view of economic science, which hinders the formation of adequate institutional support for the procedure of issuance and circulation of cryptocurrencies in general. The author defines the essence of cryptocurrency market institutions as a system which includes official (hard) restrictions (rules), unofficial (soft) restrictions (standards of behavior and stereotypes of thinking) and intuition, which ensure the achievement of optimal organization, coordination and stimulation of participants' behavior and lead to a reduction in transaction costs. The institutionalization of cryptocurrency markets implies that changes in hard restrictions (regu-lations) do not simply lead to evasion or adaptation to their implementation by their participants. Insti-tutional transformations in cryptocurrency markets are the process of formation and development of their participating institutions and other entities that implement their inherent institutions in financial transactions with cryptocurrencies; regulation of this activity through official (hard) restrictions on financial behavior with enforcement mechanisms in the presence of unofficial (soft) restrictions. The main components of institutional transformations in the cryptocurrency market in Ukraine are the im-portation of institutions and institutional transformations that can lead to institutional traps and con-gruence/convergenceof these institutions.As for the theories (concepts) in the field of cryptocurrency markets, many years of experience show that their implementation requires a long time to grow and root the relevant institutions in the mass consciousness for a certain set of ideal procedures. If successful, such theories become effective tools for cryptocurrency operations. The strategy of institutional reform of cryptocurrency markets should be systemic, i.e., along with economic transformations, shifts in morality, social and individual consciousness, etc. must be taken into account.
Valentyna Panasyuk, Khrystyna R. Halchak, Volodymyr A. Bosyi
Over the past few years, the term «cryptocurrency» has firmly entered the public consciousness. Virtual assets are gaining popularity because of their main advantages: availability, anonymity, the ability to make quick money, etc. Cryptocurrency is a code in a large book called «blockchain». Owing to the fact that the technology of «blockchain» is inherently similar to an accounting book, the world’s leading scientists are studying the issue of its implementation in the accounting system. This would allow to record each transaction automatically, reduce the cost and increase the speed of transactions. The article discusses the issue of accounting for settlements in the field of e-commerce using speculative assets. The regulatory framework for taxation of transactions with cryptocurrencies in Ukraine is analyzed. Several approaches to accounting for transactions with risky assets in Ukraine are proposed. The results of the study provide a detailed assessment of the situation in the international trade market and the state of development of settlements using cryptocurrencies, highlights the problematic aspects of normative regulation and accounting for transactions with risky assets in Ukraine and over the world. The field of e-commerce includes all transactions carried out via the Internet. This is indeed doing business online, i. e., by means of websites, social networks or mobile applications. The introduction of a method of making payments with cryptocurrency will greatly simplify the processing of transactions. This payment in digital currency is delivered anywhere in the world, regardless of the place of departure without intermediaries. At this, the cost of the transaction, or the payment fee, is much lower than with a regular bank transfer. The cryptocurrency market is currently quite volatile, classifying transactions with digital assets as «high-risk». The introduction of cryptocurrencies as a full-fledged means of payment is impossible without market regulation by financial institutions. Until that happens, commodity prices in cryptocurrency can fluctuate up to 25% compared to the previous day. Trading under such price conditions is impossible. However, a type of cryptocurrency such as «stablecoins» is protected from market fluctuations, since their pricing principle is based on the exchange rate of the real currency. For example, the USDT stablecoin is pegged to the US dollar, so its value changes along with the value of the real currency. In this case, an electronic currency such as USDT can be considered a means of payment and used in e-commerce.
Adnotacja.Nowe cyfrowe formy pieniędzy mogą umożliwić tańsze i szybsze płatności, zwiększyć dostępność finansową, zwiększyć odporność i konkurencję wśród dostawców usług płatniczych oraz ułatwić przelewy transgraniczne.W tym celu należy podjąć trudne decyzje polityczne: wyjaśnić role sektora publicznego i prywatnego w zapewnianiu bezpieczeństwa i regulowaniu cyfrowych form pieniądza.Cel badania: ewolucyjny wybór banków centralnych do digitalizacji swoich walut fiducjarnych na tle rozwoju aktywów kryptograficznych.Cel artykułu określa metody badawcze: stosowane są ogólne naukowe metody badawcze i specjalnie prawne metody poznania.Co ogólnie pozwoliło na wyciągnięcie właściwych wniosków.Zrównoważone podejście do wywrotowych technologii FinTech polega na wyeliminowaniu ich szkodliwych skutków
The rapid development of information technologies, the globalization of the world economy, and the formation of a digital economy in Ukraine lead to the transformation of socio-economic relations. The growth of digitalization of the economy, the large-scale introduction of information technologies into all spheres of human life contribute to the emergence of new industries, one of which is the crypto industry, with the appearance of which in 2008, the money market totally changed forever. More and more markets are collapsing, while more and more regulators from different countries are busy implementing legislation regarding the legalization, use and taxation of cryptocurrencies. The article is devoted to the study of the peculiarities of cryptocurrency legalization in Ukraine. The peculiarities of the law “ Pro virtualʹni aktyvy” and the stages of its implementation are considered. The draft law on amendments to the Tax Code of Ukraine regarding cryptocurrency taxation has been analyzed. The number of cryptocurrency users in Ukraine and other countries of the world, such as the USA, Venezuela, Kenya, North Africa, etc., was studied. The paper analyzes how countries such as Great Britain, the Netherlands, the USA, China, Japan and Canada regulate the cryptocurrency market and whether transactions with them are legalized at the legislative level. Conclusions were also made regarding the feasibility of legalizing cryptocurrency in Ukraine.So far, we have the Law, but for the final settlement of these issues, many different by-laws, instructions and documents still need to be developed. But already today it can be said that the State is dealing with the issue of cryptocurrency relations and is on the way to its settlement.
The digital transformation of public relations has become possible with the introduction of artificial intelligence, the Internet of Things, cloud computing, immersive technologies, and data analytics. These technologies make it possible to create a metaverse where communication, knowledge acquisition, work, business, investment, creativity, and much more are available to everyone. The article offers an in-depth analysis of the institutional legal framework governing the international financial architecture within the realm of digital transformation. It explores regulatory mechanisms and developmental trends within the legal and financial systems of both the European Union and the Republic of Poland. The study delves into instances of commercial fraud involving digital assets, thoroughly examining their implications on the traditional financial system. In the virtual world, the capital market has no borders and jurisdictions. False and unreliable information has become an instrument of manipulation by society and is actively used by market participants. The conventional financial system experiences a loss of control over its functions, particularly in the process of converting fiat funds into digital assets. Decentralized finance regulated by cryptocurrency can replace the Bretton – Woods system. Blockchain is “a technology of utmost honesty” in data transmission. The task of society is to be guided by ethical, social, moral, and environmental aspects in the initial placement of information. The effectiveness of legal regulation of the digital environment is possible only with the adoption of regulations, rules, and recommendations of international organizations in the legislation of each country. A single principle of legal regulation will allow us to build a more just world and its sustainable development.
Introduction. The digitization of the economy began back in the 50s and 60s of the 20th century, but the term "digital assets" began to be actively used by financial market participants and scientists only after 2008, the impetus for which was the appearance of the so-called distributed ledger technology and the creation of the first cryptocurrency - bitcoin. However, today there is no comprehensive definition of the concept of "digital financial asset" that would fully reveal the essence of this term. Moreover, there is sometimes terminological uncertainty and confusion regarding the terms "cryptocurrency", "digital assets", "cryptoassets" and "virtual assets", which can lead to gaps in their regulation. Therefore, clarification of the definition and types of digital financial assets is relevant. The purpose of the article is to clarify the definition of digital financial assets by revealing the essence and characteristics of digital assets and financial assets, as well as justify the classification of certain types of digital assets as financial assets. The research method (methodology) is based on the systematic use of methods of analysis, synthesis, generalization and comparison, using a complex approach to studying the problem. The results. It was determined that such a new type of assets as digital financial assets arose at the stage of digitalization of the economy associated with the emergence of distributed ledger technology. It is clarified that according to IAS, digital financial assets can be represented by instruments such as cash, equity instruments or contractual rights. It was determined that the concept of "digital assets" is identical to the concept of "electronic assets" or "virtual assets" in the domestic legal framework. The classification of types of digital assets according to various criteria is generalized. It is substantiated that digital financial assets include such groups of digital assets, which are represented by payment tokens and tokens in securities, and utilitarian tokens are not financial assets.
Purpose. The aim of the article is the determination of the normative and legal regulation of the cryptocurrency market, operations with cryptocurrencies; study of the main draft laws on the regulation of legal relations related to such assets; analysis of the activity of crypto exchanges in Ukraine and the world, prospects and possibilities of state control over trading operations as well as financial operations; studying the peculiarities of legal regulation and approaches to cryptocurrency. Methodology of research. The methodological basis of the article is an ordered system of general scientific methods of cognition, scientific deduction and induction, a method of comparison, abstraction and synthesis. Along with this, general scientific methods of research and special methods of scientific and legal knowledge were used in the article: descriptive and analytical, creative and critical, economic analysis. Analytical and synthetic, comparative and legal, hermeneutic, imitative and prognostic, phraseological methodological approaches are applied. This made it possible to find out the possibilities and legality of using virtual assets in entrepreneurial activity in Ukraine and the world; to analyse and compare the content of norms of international acts and norms that reflect the specifics of the legislative regulation of relevant relations; determine the prospects for legal regulation of the use of virtual assets; formulate conclusions, recommendations and suggestions. Findings. The development of the cryptocurrency market was considered. The essence of the main concepts and compliance with the rules in the field of normative and legal regulation of the cryptocurrency market and the activities of crypto exchanges in Ukraine and the world were studied. Features of the unification and consolidation of the legal regulation of crypto exchanges at the national and international levels are revealed. Ways of implementing regulatory and legal mechanisms for the stimulation and development of the cryptocurrency system in Ukraine at the current stage of economic development are proposed. Originality. An analysis of the legislation of Ukraine was conducted and the experience of foreign countries in the field of legal control over trading operations with cryptocurrencies and activities of crypto exchanges was substantiated for implementation in domestic practice. It is proposed to finalize the legislative framework for the regulation of the cryptocurrency market and the activity of crypto exchanges in Ukraine. Practical value. The results of the conducted research can become the basis for further scientific investigations regarding the normative and legal regulation and use of cryptocurrencies, the functioning of crypto exchanges in Ukraine for the harmonization and unification of legal norms at the national and international levels. Key words: cryptocurrency, cryptocurrency market regulation, virtual asset, digital economy, virtual assets, digital assets, civil rights object, money, means of payment, cryptocurrency, crypto market, law, bill, adaptation, financial circulation.
Abstract The new EU Markets in Crypto-Assets Regulation (“MiCA”) emphasises the prevention of market abuse as one of its five main objectives. This paper critically analyzes MiCA’s provisions on market abuse (Title VI), applying the new rules to the primary categories of crypto-asset market integrity risks to provide a coherent interpretation. In doing so, we consider both the pre-existing legal framework for protecting market integrity, chiefly the Market Abuse Regulation (“MAR”), and the unique features of crypto-asset markets. We find that by largely replicating MAR, MiCA presents “new wine in old bottles” challenges, as crypto-assets introduce novel issues that the legislator attempts to address with a subset of existing tools. The extent to which “decentralized finance” (DeFi) activities will incur liability under MiCA’s anti-market abuse provisions remains unclear, particularly regarding various blockchain network participants. Furthermore, classifying MEV strategies as market abuse may prove difficult. The absence of certain safe-harbor provisions present in MAR, such as those for self-insiders and buy-back and stabilisation schemes, may create uncertainty and potentially chill legitimate market behavior under MiCA.
The accelerated development of information technologies has fundamentally changed and improved the functioning of the global financial system, financial markets and economic exchange. Digitization of the financial sector has generated new financial opportunities, improved the quality of financial services, enabled faster and cheaper financial transactions. The challenges accompanying the digital transformation of finances are related to the regulation and security of using new digital products, the possible abuse of digital money transfers, as well as the emergence of technology-based decentralized finances, which may be a factor of factor of financial instability in direct copmpetition with the traditional financial sectors. This paper discusses the current digital transformation in traditional financial systems and decentralized digital finance (DeFi) as an emerging technology enabling decentralized exchange of new forms of digital money and payment instruments. The products and services of different DeFi platforms are constantly evolving and may become part of open decentralized finance, i.e. they can function as a single financial platform. Open Finance would enable the standardization of data exchange and interoperability of different DeFi systems, but there is still a fact that DeFi systems emerged as independent systems that are not part of a common conceptual framework. The term Open Finance refers to the future open financial system, as a continuation of the development initiated by open banking, with the aim of making financial resources of clients more accessible in a wider range of services and platforms. The Open Finance concept is also being developed within the traditional financial sector. The key condition for the development of open finance is user trust and "the creation of a wider single data market" (European Union, 2022: 5). The planned concept of open finance includes: a wider choice for customers through access to a more customized and personalized range of services and products; improving access to and use of financial services in all business segments; in line with data protection rules, providing consumers and businesses with greater transparency about how their data is used; facilitating data interoperability in open finance; embedding an open finance approach to client-centred services in a general cross-sectoral framework (European Union, 2022: 6). Adequate regulation of traditional finance and decentralized digital finance is the basis of financial and economic stability. Central banks and regulatory authorities should integrate digital innovations in complex and dynamic decentralized financial sectors in order to monitor transactions, preserve financial stability and prevent money laundering. One part this paper focuses on virtual currencies. From the viewpoint of central banks, virtual currencies are not money in the true sense of the word, for a number of reasons: they are not regulated by laws (as they have their own rules and payment systems); they do not fully perform all the functions of money; they are not a generally accepted means of exchange and payment; they currently have a limited number of users; etc. Yet, we cannot ignore their likely expansion in the future, nor the fact that a significant amount of money is invested in virtual currencies.
Не зважаючи на широке використання технології розподілених децентралізованих реєстрів, зокрема в популярних платформах Bitcoin і Etherium, їм притаманні суттєві недоліки. Головним з них є невисока швидкість обробки транзакцій. Для його усунення в цій роботі запропоновано двошарову модель розподіленого деценталізованого реєстру, що дозволить не тільки підвищити швидкість обробки транзакцій, а й збільшити масштабованість. Кожен з шарів моделі відрізняється як за функціями, що виконуються, так і за принципом створення мережі. Перший – є мережа, що побудована на архітектурі з використанням спрямованого ациклічного графу – DSGChain, яка саме створює блоки. Другим – є мережа, що являє собою класичний блокчейн. В цій мережі відбувається формування консенсусу Proof of Stake для валідації та фіналізації блоків. В рамках запропонованої моделі розроблено метод упорядкування блоків DAG. Метод базується на введеному понятті скелетних блоків. Метод дає змогу суттєво зменшити трафік між двома мережами. Розроблено метод формування оптимістичного (імовірнісного) консенсусу. Ймовірнісний консенсус дає змогу значно скоротити час фіналізації блоків. При формуванні комітетів для PoS консенсусу запропоновано використовувати новий метод перемішування на основі перетворення Tent, який суттєво підвищує рівень безпеки реєстру в цілому. На основі запропонованої моделі створено її програмну реалізацію у вигляді платформи Waterfall. Навантажувальні експерименти з тестовою мережею продемонстрували, що вона забезпечує швидкість обробки транзакцій більше 2000 tps при високому рівні масштабування. Таким чином, поєднання технологій блокчейн та DAGChain в одній моделі розподіленого реєстру дає змогу підвищити швидкість обробки транзакцій на порядки. Подальшим напрямком прискорення обробки даних є застосування шардингу в DAGChain мережі, що може ще більше підвищити показники ефективності розподіленого реєстру.
The study determines the peculiarities of the development of the cryptocurrency asset market in the conditions of digitalization, their legal recognition and subsequent reflection in the accounting of transactions related to their circulation. The current system of regulatory legal and accounting support for the functioning of cryptocurrency assets in accordance with the requirements of national legislation has been analyzed. A critical assessment was made of draft legislative acts regarding the recognition of cryptocurrencies as an asset of the enterprise and the order of functioning of their market as a medium of exchange. The analysis of the definition of virtual assets and cryptocurrencies from the point of view of the legal aspect of their economic essence and recognition as an asset, as well as the implementation of accounting operations for the reflection and subsequent taxation of income and expenses in the calculation of financial results from operations with them, was carried out. The main trends in the development of the world market of virtual assets and cryptocurrencies in the conditions of digitalization of the economic space have been determined. The article presents different views of scientists regarding the procedure for displaying cryptocurrency assets in accounting, and also defines the main trends of the possibility of using cryptocurrency assets as electronic money when conducting settlement operations between business entities and related warnings from official governments and central financial regulators of the virtual assets market. It is emphasized the need to form a unified approach to the definition of the concepts of a virtual asset in domestic legal acts, as well as cryptocurrency from a legal and accounting point of view, with the application of the current instruction on the application of the Chart of Accounts for the accounting of assets, capital, liabilities and economic operations of enterprises and organizations, which would later meet the requirements of international accounting standards. The main recommendations for accounting transactions with virtual assets and cryptocurrencies are presented in accordance with the requirements of international accounting standards, depending on the purpose of holding such assets.
A smart contract is a type of digital agreement between several parties without intermediaries. In many areas of life, the smart contract is a breakthrough technology because it can change the perception of deals. At first sight, creating a smart contract may seem like a simple thing, but to create it, should to know and use a large number of technologies. This article discusses method of creating smart contracts based on Ethereum using technologies such as the Ethereum network, the Solidity programming language, the Ethereum Virtual Machine (EVM), which takes the main role in creating and executing smart contracts and supporting instruments Ganache and Truffle. A smart contract has been implemented based on the sale of movie tickets using the previously mentioned technologies. It took 0.65 seconds to complete a transaction for the sale of 10 tickets between wallets. Once this transaction made, the smart contract cannot change, which makes it unique compared to other technologies. In general, creating smart contracts with Solidity requires a good understanding of object-oriented programming languages, but most of the functions available in the Solidity packages perform the same functionality. Ethereum's uniqueness allows blockchain-based applications to run autonomously, but this also has its drawbacks. Also presented and investigated in the article an analysis of the time trends of the Ethereum smart contract out using the R programming language and the R-Studio development environment. Data of Ethereum smart contract for analysis taken from an open source Kaggle. The dataset contains 1599 rows of data and 8 unique columns of Ethereum smart contract values. The best days and months in relation to the ROI indicator investigated. Using this methodology and tools of creating smart contract can be used for further studies. Keywords: smart contract, blockchain, Solidity, bitcoin, Ethereum, cryptocurrency.
Purpose: The aim of this article is to present the concept of Decentralized Autonomous Organizations in the context of the evolution of organizational structures. The article presents the current state of knowledge about DAOs, taking into account the principles of their functioning and the current state of development. The roles of individual actors involved in the DAO were also discussed and typical features of the DAO organization were indicated. Design/methodology/approach: The main method used in this article is a literature review supplemented with an analysis of online industry sources and reports of consulting companies. The analysis included a review of the characteristics of the DAO organization against the background of traditional structures and the ways of functioning of the DAO. Findings: The article describes the characteristics of organizations managed with smart contracts created thanks to the use of blockchain technology. The stages of the formation of DAOs and the main principles of their functioning based on the possession of digital tokens of a given organization, as well as the right to participate in voting on decisions made in the DAO, were indicated. The basic advantages and risks associated with the functioning of DAOs were also indicated. Originality/value: The originality of this article lies in the confrontation of the theory and practice of DAOs with traditional, hierarchical organizations with specific features. The current literature in the field of DAOs is not very extensive, especially in relation to the issue of organizational structures, as demonstrated in the Materials and Methods section of this article. Keywords: decentralized autonomous organization, organizational structure, blockchain technology, smart contracts. Category of the paper: literature review.
Decentralized Autonomous Organization (DAO) is a new form of organization, the innovation of which consists in the use of blockchain technology to record the applicable rules governing the project as well as the rights and obligations of its members, usually investors. Moreover, the method of financing the project is also new here, since tokens (cryptocurrency), which are acquired by investors for the capital contributed, are most frequently used. Management in DAO is previously unheard of (until the creation of DAO-2016), since there are no governing bodies, and all decisions are made by the voting of all members of the organization. In the article, an attempt is made to assess the DAO management process, having previously analyzed blockchain technology and the specificity of this new form of organization. The own research was conducted on a selected DAO project, when analyzing the management process implemented by voting by the members of this organization from its launch (May 2022) to 11 May 2023. The obtained results confirmed the dominance of majority shareholders in DAO votes, although the method of voting (Qudratic voting) used in the project under study to protect the rights of small shareholders significantly reduced this impact. The unusual unanimity of decision-makers was also noted (as much as 65% of unanimous votes), which, as it turned out, could be the result of information campaigns conducted before each vote by groups of small investors deeply involved in the project. These activities should also translate into the accuracy of the decisions made, and thus the quality of the DAO management process.
The processes of digitization and rapid development of information technologies have a direct impact on the transformation of modernity. The sphere of finance did not bypass these processes. A few dozen years ago, it became impossible to pay for services and goods without having a physical monetary unit with you, but now cashless transactions are being given more and more advantages. But today requires consideration of the issue of the functioning of a new type of currency, "cryptocurrencies", which have appeared very recently and began to develop rapidly. Such innovations need to be sensibly and legislated correctly, based on the prevailing principles of law. The article examines essential issues that clearly demonstrate the main problems that need to be resolved by legislators in order to legalize the cryptocurrencies. When studying the problem, attention was paid to the history of the creation of the first cryptocurrency and its development, others see cryptocurrency and their differences among themselves, the principles of operation and the advantages of using such currencies. At the current stage, there are already more than two thousand types of cryptocurrencies, but this is not the final number of such currencies, because the progress of growing interest in the topic of digital money attracts the attention of more and more Internet users every day. Since development processes don’t stand still and the trend of digital money acquires new manifestations, the exceptional need to regulate such phenomena challenges the many rights systems of different countries, as well as their budgets, to properly achieve legal value and stability for the state and society as a whole. Although domestic and foreign regulation of cryptocurrencies circulation is insufficiently resolved, the analysis of information and positions of scientists and law owners gave a fairly broad identification of the growth of the cryptocurrencies circulation market and interests among citizens of both Ukraine and foreign countries. With proper research, development, and compliance with legal regulations, cryptocurrencies can gradually take a significant place in people's full lives.
Abstract Summary The COVID-19 pandemic experience has driven us to rely on technology so much on the development and expansion of technology, including cashless transactions. Criminal groups may become more interested in electronic payments and virtual currencies because of increased traffic in these areas. When comparing the second half of the 2019 to the first half of the 2020, the number of fraudulent card transactions increased by 11.4%. New developments in virtual currency trading regulations, including the digital finance package, which includes, among other things, a draught regulation from the European Parliament and an amended act to combat money laundering and terrorist financing, among others. For the reasons stated above, these regulations may lead to a virtual currency market collapse and the withdrawal of investors and the siphoning of money into Asian markets as a result. The current regulations are a manifestation of total regulation and do not encourage technological advancement.