Journal of Legal, Ethical and Regulatory Issues (Print ISSN: 1544-0036; Online ISSN: 1544-0044)

Abstract

Legal Status of Cryptocurrency as Electronic Money

Author(s): Oleksii Dniprov, Yurii Chyzhmar, Andrii Fomenko, Volodymyr Shablystyi, Oleksandr Sydorov

In different countries, the approach to the legal status of cryptocurrencies is significantly different - some countries (USA, EU, Canada, Israel, Singapore, Japan, etc.) have recognized the expediency of using them and are working to create a legal framework that enhances the legal status of virtual currencies ( as electronic money, as exchange funds, as a specific type of currency, etc.), and other countries (China, the Russian Federation)-reject cryptocurrencies and prohibit their circulation. China banned the circulation of cryptocurrency within its own territory after the government almost lost control over the circulation of funds in the country due to their significant spread. In the Russian Federation, cryptocurrency circulation was prohibited due to the conservatism of the financial system, which is not able to quickly respond to the introduction of innovative processes and ensure their proper regulation. Despite the ban, cryptocurrencies in individual countries and their circulation in the virtual space continue to grow. The legal prohibition on the use of cryptocurrencies does not stop the processes of their use, but only does not allow the states that resort to such a ban to take part in regulating the processes of using cryptocurrencies, since they are removed from the process of their circulation.