Financial and legal regulation of virtual currency circulation

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Virtual currencies have become an important part of the modern financial system, influencing economic processes and financial transactions. They include cryptocurrencies and electronic money used for fast and secure transactions. Cryptocurrencies, such as bitcoin, operate on the basis of decentralized systems and blockchain technology, ensuring transparency and anonymity of payments. At the same time, electronic money is backed by government or financial institutions and is pegged to fiat currencies, which ensures its stability. The main problem that arises when using virtual currencies is the lack of clear legal regulation, which creates a number of risks for states and users. Today, government agencies need to define the legal status of cryptocurrencies and develop appropriate legislation to regulate their circulation, taxation, and the operation of crypto exchanges. This will help to protect consumer rights and prevent financial crimes such as money laundering, tax evasion and terrorist financing. Virtual currencies open up new opportunities for global markets by lowering transaction costs and reducing the need for financial intermediaries. However, their anonymity and lack of proper regulation pose significant challenges to public financial systems that seek to ensure economic stability and financial transparency. Virtual currencies are creating a new model of commodity-money relations, which simultaneously brings new opportunities for businesses and citizens and challenges for government agencies. They reduce transaction costs, allow for quick payments, and facilitate access to international markets. However, the lack of clear regulations and oversight leads to risks that threaten economic stability and consumer rights. The development of an effective regulatory framework is essential to mitigate these risks and to the development of virtual currencies in the future. This article analyzes the key issues of legal regulation of virtual currencies, as well as the prospects for their development based on current legislation.