XV Международная студенческая научная конференция Студенческий научный форум - 2023

As a result of the massive development of the Internet and computerised technologies, virtual currencies, including cryptocurrency, have emerged. In fact, they are the answer to many challenges and innovations of modern life. Cryptocurrency is any type of currency in digital or virtual form. It is a decentralized system that allows any user, regardless of location, to receive and send payments. There is no central authority for issuing or regulating cryptocurrencies. The rapid popularity of cryptocurrencies is not only due to the fact that they provide the necessary level of anonymity and privacy, but also because they do not require centralized confirmation of payments.

Cryptocurrency itself does not have any particular tangible or electronic form - cryptocurrency payments exist solely in digital form in an online database describing specific transactions. They do not involve transactions with physical money with real-world exchange possibilities.

Cryptocurrency is built on a blockchain (literally, a chain of blocks), a technology for encrypting and storing data that is distributed across multiple computers connected to a common network. In blockchain, each successive block contains information about the previous block and the movement of funds - what amounts have moved, from which wallet to which another one. It is extremely difficult to tamper with the blockchain and enter false data.

Bitcoin has been around since 2009, but cryptocurrencies and the use of blockchain technology are still in their infancy financially. However, they are expected to develop rapidly in the future. In the future, cryptocurrencies may be used in trade transactions with stocks, bonds and other financial assets, and become part of the state's financial system.

Even now, some countries are very optimistic about the potential of blockchain development and the launch of national cryptocurrencies. For example, Venezuela launched its national cryptocurrency El Petro in early 2018, and a number of other countries are also considering issuing national cryptocurrencies. But are cryptocurrencies so good compared to other forms of money?

Despite the fact that virtual currencies are extremely widespread in the world and are used everywhere, the economic and legal basis of this phenomenon is poorly developed and there is no clear and generally accepted definition of virtual currency. There are still different approaches to assessing the role and opportunities of cryptocurrencies, as well as their legal definition, and there are significant concerns about the use of these currencies in monetary circulation.

The security of cryptocurrencies also raises concerns. Unlike government-backed money, the value of virtual currencies is entirely determined by supply and demand. This can cause sharp fluctuations that can bring to investors both significant profits and significant losses. In the event of a major financial crisis, cryptocurrency holders are not protected. In periods of great turmoil in the cryptocurrency market, there have been numerous problems with blocking customer accounts. In addition, unstable bitcoin exchange rates can lead to the depreciation of assets and thus provoke bankruptcies in a short period of time.

The level of customer service on cryptocurrency exchanges is relatively low. These features require market participants to have a high level of financial literacy and appropriate skills, because in the case of operational errors, transaction reversal is in most cases impossible, leading to a complete loss of the client's cryptocurrency assets.

There are specific problems in different countries that hinder the development of cryptocurrencies and their use in the financial system of the state. Let us consider such problems on the example of Russia. There is an explicit ban on the use of any currencies other than the ruble as a payment instrument. Some retail companies may indicate that they accept payments for their goods in cryptocurrency, but this is more of a marketing ploy. They do not have any tools to officially accept such payment. Some sort of workaround would be used, with the corresponding risks for consumer rights.

Also an obstacle to the development of cryptocurrencies in Russia is an underdeveloped digital sphere - cryptocurrencies by their nature are designed for digital circulation. In addition, the country lacks the necessary infrastructure for the use of cryptocurrencies. There are no national crypto-exchanges where it would be possible to exchange fiat (traditional) money for cryptocurrency and vice versa in Russia. There are international crypto-exchanges with Russian roots, but they operate outside the Russian legal framework and are under the scrutiny of domestic law enforcement agencies.

There is no regulatory framework for cryptocurrencies in our country that takes into account their specifics. Because of this, crypto-business is actually forced to operate in a "gray zone". This not only creates additional legal risks for it, but also deprives it of the opportunity to legally protect its interests. If the crypto-business is attacked by intruders, law enforcement authorities will not only fail to protect business interests, but may also prohibit the company's activities.

In addition, there is no definition of cryptocurrency in the legislation. Prime Minister Mishustin stressed in his report that the government is against the recognition of cryptocurrencies as a means of payment.

Considering the above, we can assume that cryptocurrency in our country can find limited use in those areas where it does not create risks for the use of illegal payments. In fact, this means that the main area of its use will probably be to serve government needs in situations where the use of traditional money is inefficient or impossible.

It is also possible to implement all sorts of niche projects in which cryptocurrencies will not be used by themselves, but as an intermediate stage for traditional financial transactions, i.e. as an intermediary currency.

In Western countries cryptocurrencies are now being created, that is, cryptocurrencies are being developed as an independent financial instrument. In fact, this means that instead of replacing traditional money, it is becoming a kind of superstructure over it. Cryptocurrencies are gradually being transformed into bank payment instruments, i.e. they begin to play the same role as traditional bank checks, etc., of course, at a new technological level.

Thus, there is no need to talk about the replacement of traditional money with cryptocurrencies, contrary to previous expectations of crypto-enthusiasts, neither in the world, nor in Russia, at least in the medium term.

Literature:

Lipatnikov V. S. Prospects for the use of cryptocurrencies in the Russian Federation // Information society. - 2019. - №№6. - С. 42-48.

What is a cryptocurrency and how is it used? // Kaspersky URL: https://www.kaspersky.ru/resource-center/definitions/what-is-cryptocurrency (дата обращения: 16.11.2022).

Kosov M. E. Functioning of the Cryptocurrency Market: Current State and Development Problems // Cyberleninka URL: https://cyberleninka.ru/article/n/funktsionirovanie-rynka-kriptovalyut-tekuschee-sostoyanie-i-problemy-razvitiya (дата обращения: 16.11.2022).

Dorofeev M.L., Kosov M. E. The role and prospects for the introduction of cryptocurrencies in the modern global financial system // Cyberleninka URL: https://cyberleninka.ru/article/n/rol-i-perspektivy-vnedreniya-kriptovalyut-v-sovremennuyu-mirovuyu-finansovuyu-sistemu (дата обращения: 16.11.2022).

Cryptocurrency: main terms and basics of regulation // Banki URL: https://www.banki.ru/investment/investment_education/?id=10966730 (дата обращения: 16.11.2022).

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