REGULATION OF CRYPTOCURRENCIES AS A MECHANISM OF NEUTRALIZATION THEIR WEAKNESSES: MODEL APPROACH

Abstract

Introduction. Dynamic changes in the geo-economic and geopolitical spaces associated with the global financial crisis of 2008-2009, the coronavirus pandemic and the Russian-Ukrainian war have led to the accelerated development of fintech, in particular the emergence of cryptocurrencies.
 Problem. The high probability of widespread use of cryptocurrencies as a means of payment, circulation and investment with particular urgency raises questions about their regulation at the state and international levels.
 Purpose: an in-depth analysis of the strengths and weaknesses of cryptocurrencies in terms of their regulation within the respective models.
 The presentation of the material of the article. Cryptocurrencies (bitcoin and others), while not related to fiat money, still have a number of strengths, in particular, such as decentralized character. At the same time, they have many weaknesses, namely, the imperfection of blockchain technology; significant energy consumption of mining; high volatility; the presence of "bad actors" associated with laundering "dirty money"; displacement of national currencies. It is for their neutralization that the regulatory mechanism should be used.
 Currently, five models of cryptocurrency regulation have been clearly outlined: repressive, which implies a complete ban (Bolivia, etc.); conservative - allows them to buy and sell only to individuals (China); liberal - provides for most operations of their circulation (EU, Ukraine, USA, etc.); legal circulation (Switzerland, Japan, etc.); permitting, under which bitcoin is recognized as a legitimate means of payment (El Salvador).
 The formation of cryptocurrency regulation models is influenced by the actions of world and national regulators, international payment systems and stock markets.Results and its discussion. 
 Conclusions. Despite significant restrictions, the global volume of cryptocurrency transactions is growing rapidly. Ukraine's cryptocurrency use index, including for the defense of the country, is one of the world leaders.