Cryptocurrency Research Articles

Study the Role of Block Chain in Financial Services the Impact of Crypto Currencies on Traditional Banking System and Regulatory Challenges

The paper looks into the impact of cryptocurrencies on Pakistan's traditional banking sector regarding issues of regulation, adaptation to technology, and the implications of digital money. The investigation employed a qualitative method and critical thematic analysis in analyzing data gathered through semi-structured interviews conducted with 14 crypto currency investors and 8 banking practitioners. The number of samples in the interview is sufficient enough to explore points of view about major stakeholders' sectors. A thematic analysis technique was used during the identification of patterns and codes on how crypto currency influences banking products, regulation, and implementation of block chain. Conclusion: This study concluded that opportunities for financial inclusivity and convenience exist with crypto currency but some notable issues with its regulation and instability still exist. The insights of the investigation are of useful value in ascertaining how digital money interfaces with conventional banks, which also has implications on future policy as well as the practices of banks.

Features of qualification of fraud related to the use of cryptoassets

Manuscript presents the genesis regarding the grounds for criminal liability for fraud: Art. 190 of the Criminal Code of Ukraine. The features of the qualification contained, in particular, in the fourth part of the article regarding illegal operations with using electronic computing equipment and the fifth part of the article regarding fraud committed by an organized group. It is emphasized that the national legislation does not have a clear definition of the concept of «electronic and computing equipment» and it is noted that the legislator’s use of this term in the text of the article does not fully comply with the principle of legal certainty. The criminal-legal features of fraud associated with the use of cryptoassets through illegal operations using electronic computing equipment and fraud associated with the use of cryptoassets committed by an organized group are determined. A typical organization of the crime is described with a detailed distribution of the roles of accomplices in fraud associated with the use of cryptoassets. Additional features of an organized criminal group that commits fraud associated with the use of cryptoassets are outlined, in particular, the duration of the criminal group’s activities; the presence of specialization in the activities of the criminal group; the presence of a leader with authority; the distribution of functional responsibilities among the members of the group; the self-serving orientation of the group’s criminal activities; the creation of a system of protection against exposure. Examples of such actions contained in the decisions of Ukrainian courts are given. The most common type of fraud involving the use of crypto assets in Ukraine in 2024 was fraud committed using international cryptocurrency exchanges (for example, Binance).

Cryptocurrency Market Volatility and Forecasting: A Comparative Analysis of Modern Machine Learning Models for Cryptocurrencies Predicting Accuracy

Cryptocurrency (CRP) has grown in popularity over the last decade. Since there is no central body to control the Bitcoin (BTC) markets, they are extremely volatile. However, several similar variables that cause price volatility in traditional markets also affect cryptocurrencies. Several bubble phases have taken place in BTC prices, mostly during the years 2013 and 2017. Other digital currencies of primary importance, such as Ethereum and Litecoin, also exhibited several bubble phases. Among traditional methods of analysis for this volatile market, only a small number of studies focused on Machine Learning (ML) techniques. The present study objective is to get an in-depth knowledge of the time series properties of CRP data and combine volatility models with ML models. In the hybrid method, we first apply the Nonlinear Generalized Autoregressive Conditional Heteroskedasticity (NGARCH) model with asymmetric distribution to calculate standardized returns, then forecast the UP and DOWN movement of standardized returns through ML models such as Logistic Regression (LR), Linear Discrimination Analysis (LDA), Quadratic Discrimination Analysis (QDA), Artificial Neural Networks (ANNs), K-Nearest Neighbors (KNN), and Support Vector Machine (SVM). The findings show that the proposed hybrid approach of time series models and ML accurately predicts prices; specifically, the KNN model reveals that the scheme can be applicable to CRP market prediction. It is deduced that ML methods combined with volatility models have the tendency to better forecast this volatile market.

Are the Crypto Markets Shock Resilient to COVID-19? A Comparative Investigation of Trading Prices and Volumes

The emergence of crypto currency as an alternative source of currency has been dubbed as one of the greatest phenomenon of the 21st century. Over the years, crypto currencies have grossly interrupted the traditional financial system and they continue to act as a catalyst for its revolution. However, cryptocurrencies have not been free from misery and controversies. The aim of this study is to explore and investigate empirically the impact of Covid-19 pandemic on price and volume dynamics in crypto markets. The study makes use of two data samples, but these samples are analyzed separately and independently. The first sample consists of Top Five Cryptocurrencies in terms of market capitalization (Bitcoin, Ethereum, XRP, Binance coin and Litecoin) as at 7 November 2020. The second one is made up of the Bottom Five Cryptocurrencies among the top 40 cryptocurrencies (FTX Token, Huobi Token, Filecoin, Dash and Decreed) as at 7 November 2020 again. The data among the Top Five Cryptocurrencies ranges from 2014 to 2021 and the data among the Bottom Five Cryptocurrencies ranges from 2018 to 2021.. The empirical results reveal that all crypto-currencies are integrated at order 1 i.e. I (1). The empirical analysis confirms presence of strong evidence for intra-and-inter long run relationship between price and volume dynamics within the crypto market irrespective of whether it is pre-pandemic or pandemic period. More so, there is convincing evidence from the results that much of the variance among the prices and volumes of the top five cryptocurrencies is attributed to the Bitcoin price-volume dynamics. This implies that it is critical for crypto market traders, investors and portfolio managers, before making any investment decision must consider the dynamics of price and trading volumes of BITCOIN as they hugely impact the prices and volumes of other altcoins.

Embracing the Future or Buying Into the Bubble: Do Sophisticated Institutions Invest in Crypto Assets?

ABSTRACTWe document that early institutional investors in cryptocurrencies exhibit innovation and adaptability in financial markets, despite the asset class's inherent ambiguity and risk. Investing in crypto assets signals a managerial willingness to undertake reputational and career risks. We compare the performance of institutions that engage in crypto investments with that of their non‐crypto‐investing peers. Our results indicate that institutional crypto investors outperform their peers by about 2.8% per year. Using propensity score matching, we find that early crypto investors outperform both followers and non‐holders as crypto investments become increasingly prevalent in markets.

The essence of private and public placement of cryptoassets for raising capital in comparison with securities: the approach of the European Union and Ukraine

The crypto-asset industry is a dynamic field that is developing faster than legislators can adopt the relevant regulations to control it. Today, there are many areas of the crypto-asset sphere where they can already be used, but due to the lack of regulation, their application falls into a gray zone. It is clear that in technological sectors that are developing quite rapidly, in the case of developing laws, a situation may arise where, by the time they are adopted, they may already seem outdated, since there will be a fundamental change in the way we work with these sectors. However, in any case, the lack of regulation creates obstacles to finance, in particular, the crypto-industry, since customers willing to invest do not have a clear understanding of the protection of their invested assets. In particular, crypto-projects often face the need for financing for further development. One of the assets that they can offer potential buyers is their cryptoasset, which in the future will become one of or even the main element of their product. Therefore, in fact, a cryptoasset in this role can act as a financial instrument for attracting capital. This configuration is very similar to the placement of securities, through which joint-stock companies can also raise capital for their further purposes. Nevertheless, if the regulation of the entire procedure for the issuance and subsequent placement of securities is established in almost all states, then the following procedure for cryptoassets is currently practically absent. However, in order to develop appropriate provisions for the placement of cryptoassets, an understanding of the essence of this phenomenon is required. Since it is as close as possible to the placement of securities, it is worth examining the regulatory acts of those states that have already taken (or tried to take) appropriate steps in comparison with securities. It is examined in the article the essence of the concept of placement of crypto-assets comparing to securities in the European Union as the first state that took a step towards enshrining this phenomenon in its own legislation to open up opportunities for raising capital through the sale of crypto-assets. The relevant law of Ukraine, which has never entered into force, which also provides for appropriate provisions for the placement of cryptoassets, is also examined. At the same time, in the article it is also distinguished the concepts of public and private placement in the legislation of the specified states as two ways of raising capital by selling crypto assets. As a result, it is concluded in the article that states that wish to promote the development of the domestic crypto-industry, when adopting a profile law or, at least, enshrining it in other legislative acts, should introduce the concept of placement of crypto-assets, as well as develop its detailed regulation, including by dividing it into public and private placement. At the same time, this procedure can mainly be based on the procedure for placing securities, but taking into account the technical nature of the crypto assets themselves.

State and trends of regulation of crypto assets and cryptocurrency exchanges

This article analyses the current state and trends in the regulation of trading of crypto assets and crypto exchanges at the global level. The enacted laws and regulations of the jurisdictions of the United States of America (herein-after referred to as USA) and the European Union (hereinafter referred to as EU) are indicated. It is emphasised that the regulatory framework of the EU is an example of effective international regulation. It is noted that the legislation in the USA regarding the regulation of the crypto exchanges and crypto assets is at the development stage, and there are contradictions between authorities considering the scope of the necessary regulation. The steps that should be taken at the global level to harmonise regulatory standards are analysed. The key directions for the development of the global regulation of the crypto exchanges include expansion of requirements to combat money laundering and financing of terrorism, introduction of mechanisms for training and protecting investors and information disclosure requirements. The author emphasises the need for interaction between industry representatives and regulators to manage the risks associated with cryptocurrencies, including prevention of market manipulation and fraud. The results of the work will be useful in shaping the concepts of the national and global regular framework regarding the trading of the crypto assets. Methods of analysis, synthesis, formal-logical, comparative, and descriptive analysis have been used as research methods.

Crypto currency and economic growth in Nigeria

Crypto currency and economic growth in Nigeria

Leveraging ERC20 Crypto Tokens for Business Growth: Overcoming Regulatory Challenges and Market Monopolies

Private companies seeking to grow often face complex regulations that hinder their development or delay decision-making. These challenges stem from market monopolies that tend to absorb smaller entities. However, principles of free markets and democratic governance protect social justice and prevent the concentration of corrupting power. This article explores company-issued crypto assets as a promising growth avenue. It emphasizes the importance of carefully timing the introduction of crypto assets to the public, as this can significantly impact their success and value. The Ethereum-based ERC20 protocol is highlighted as a key standard for issuing crypto tokens. Ethereum, a decentralized blockchain platform, is advantageous for implementing complex business logic and smart contracts. Companies often issue tokens to raise capital through ICOs, with the ERC20 protocol being the most widely used standard. This protocol ensures compatibility within the Ethereum ecosystem, making it a preferred choice for new crypto token development.

Legal Discourse on Legalizing Cryptocurrency as Legal Tender in Indonesia: Insights from Global Practices

Cryptocurrency in Indonesia presents both advantages and challenges. The Indonesian government has not yet given legality to cryptocurrency as legal tender. However, even though it does not have specific regulations, this matter regarding crypto is described as a crypto asset in several legal regulations in Indonesia. This study aims to examine the potential for implementing cryptocurrency as legal tender in Indonesia and whether it can be regulated within the country's legal framework. It also compares Indonesia's situation with the legal systems of El Salvador and the Central African Republic, where cryptocurrency has been adopted as legal tender. This study was studied in a socio-legal research method review, which used several approaches from a legislative perspective, case studies, and a comparison of state laws. The findings reveal that while there is no specific law in Indonesia that regulates cryptocurrency as legal tender, there are existing regulations governing crypto assets, overseen by the country's futures supervisory agency. Crypto in Indonesia does not yet meet the standard requirements as legal tender, such as tability of value, divisibility, and uniformity. Based on a comparison of laws in El Salvador and the Central African Republic that have established crypto as legal tender, several comparisons can be seen starting from the structure, substance, and legal culture, where support for regulations and institutions as well as community support can maximize the legalization of crypto in Indonesia, but this requires several special considerations related to the impact and influence that will be faced if the legality of crypto is implemented. Therefore, based on the comparison of the law, it will be seen whether Indonesia.

Dynamic model of currency exchange based on investor behavior

In the modern financial environment, cryptocurrencies have gained significant popularity, becoming an important element of the global economy and financial markets. The dynamic development of blockchain technologies and decentralized financial instruments fosters increased interest from both private investors and institutional players. However, the high volatility of cryptocurrencies and the complexity of the mechanisms behind their price formation necessitate a detailed study of these processes. This paper models cryptocurrency exchange operations, analyzing price formation influenced by buying, selling, and introducing new crypto coins to the market. The system simulates investor behavior with individual parameters: initial balances, risk profiles, and profit-driven trading strategies over a specified period. The model takes into account the psychological aspects of investor behavior, their reaction to changing market conditions, and the impact of external factors such as news and regulatory changes. Special attention is paid to analyzing the impact of adding additional quantities of coins to the exchange at a reduced price during peak cryptocurrency price values. This creates conditions for activating trading operations, increasing liquidity, and affecting overall market dynamics, particularly volatility and price fluctuation trends. The study shows how such interventions can be used to stabilize the market or stimulate its further growth. The analysis of the obtained data allows for detailed observation of changes in the cryptocurrency’s value over time, identifying patterns and trends. Using statistical and analytical methods, the impact of different investor strategies on their financial results and the overall market situation was investigated. This enables assessing how investor decisions-timing, trade volume, and market reactions-impact profits and market dynamics. The research emphasizes the importance of a deep understanding of market mechanisms and trading psychology and can serve as a basis for developing effective trading strategies on cryptocurrency exchanges. The obtained results may be useful for traders, financial analysts, and developers of algorithmic trading systems, contributing to increased efficiency and stability of cryptocurrency markets. Moreover, the findings of the work can be applied to improve regulatory approaches and policies regarding cryptocurrencies.

Smart Contract on a Crypto Assets in the Civil Law and Common Law Jurisdictions: Implementation of Best Practices

The article is devoted to the analysis on a crypto assets smart contract in the civil law and common law jurisdictions and the implementation of the best practices into Ukrainian law. It is argued that the essence of a crypto assets smart contract is that it is a self-executing contract which is represented and executed by a computer program, remains unchanged and unstoppable after the creation of this contract, and its terms are included in the internal functions of a decentralized database which is not controlled by the databases of the parties to the contract or third parties. It is noted that a cryptoasset smart contract, like any contract, may be declared invalid if the will to conclude it does not meet the conditions for the validity of this transaction, regardless of the form in which this transaction is concluded, as in this case in the form of a computer code. It is also stated that the terms of a cryptoasset smart contract must be specific (clear, unambiguous), feasible (objective), legitimate, and capable of automation (no evaluative terms, such as “reasonable time,” may be used), exist within the blockchain platform (on which cryptoassets are currently transacted) and not involve obtaining and confirming information from outside (in this regard, the terms of force majeure are not specified in the smart contract). The study applies dialectical, comparative legal, formal and logical, and systemic and structural methods of scientific knowledge. It is proved that a smart contract is a contract which is represented and executed by a computer program, the components of which are a computer code, some or all of the terms of this contract which are fulfilled upon the occurrence of predefined events, are stored in an electronic register system which records the result of execution of this program, and the contract itself cannot be changed and is executed in accordance with the programmed instructions of the computer program. The author concludes that the determination of the person who is legally liable when a smart contract fails to perform the programmed function depends on the terms of the smart contract, and in their absence, the provisions of applicable law regarding the legal consequences of non-performance of the contract and liability for such non-performance should be used.

Sustainability or artificial intelligence? Returns and volatility connectedness in crypto assets

Sustainability or artificial intelligence? Returns and volatility connectedness in crypto assets

A Darwinian Approach via ML to the Analysis of Cryptocurrencies’ Returns

Abstract This study adopts a Darwinian approach leveraging machine learning (ML) to analyze cryptocurrency returns and their interactions with traditional financial markets. Using a daily dataset from 2018 to 2023, the Random Forest model proved particularly effective in identifying key factors influencing cryptocurrency returns, including technology stock indices (NASDAQ), global equity indices (S&P500, Eurostoxx600), commodity prices (gold, crude oil), and market sentiment (Google Trends). The analysis reveals consistent positive relationships between market sentiment and cryptocurrency returns, highlighting the crucial role of public interest in shaping long-term outcomes. Cryptocurrencies emerge as a distinct asset class with specific correlations to traditional markets and investor sentiment. The study provides strategic insights into understanding cryptocurrency behavior and integrating these dynamics into informed portfolio strategies. It emphasizes the importance of monitoring both traditional financial indices and market sentiment for investment decisions across various time horizons. JEL classification numbers: C58, G11, G15. Keywords: Crypto Assets, Bitcoin, Machine Learning, Investor Decisions.

Effect of Crypto Currency on Financial Market in Kenya

Effect of Crypto Currency on Financial Market in Kenya

Will Muslims integrate an Islamic accounting principle (zakat) into the financial paradigm reshaped by cryptocurrencies? Insights into cryptocurrencies holder perspectives

Purpose Muslim engagement with cryptocurrencies (CC) raises fundamental questions rooted in religious faith: How should Muslims integrate Islamic Accounting principles like zakat into this new and rapidly evolving financial paradigm? Thus, it is essential to understand CC holders’ perceptions thoroughly and whether they are willing to pay zakat using crypto assets. This research aims to explore factors influencing Muslim CC holders’ intention to pay zakat on CC, emphasizing financial risk, theory of planned behavior (TPB) constructs and Shariah compliance’s moderating role. Design/methodology/approach This attempt uses a quantitative approach through a cross-sectional research design, using purposive sampling to gather data from Muslim CC holders. An extended theory of planned behavior (ETPB) model is applied to comprehensively analyze the key factors influencing intentions to pay zakat on CC. SmartPLS software is used to generate meaningful findings. Findings The study finds that financial risk associated with CC exerted a negative influence on TPB constructs, attitude (ATT), social norms (SN) and perceived behavioral control regarding zakat on CC (PBC). However, ATT and PBC positively shaped holders’ intention to pay zakat on CC. Interestingly, Shariah compliance-moderated interactions of TPB constructs on payment intentions were statistically significant. Originality/value With the rise of CC, a profound transformation is underway in the financial landscape. As this evolution unfolds, it becomes increasingly essential for stakeholders to understand how zakat could fit into such a new and rapidly evolving paradigm. A pioneering effort was made in this study by exploring Muslim CC holders’ intentions to fulfill zakat obligations, bridging a significant gap in the literature.

The mechanism of cryptocurrency adoption as a means of payment in business

This article examines the theoretical foundations and conceptual specifics of the mechanism for adopting cryptocurrencies as a payment method in business. It discusses the definition and key features of this mechanism, along with summarizing essential recommendations for the use of cryptocurrencies and crypto assets in business payments. The cryptocurrency adoption framework is analyzed through the organizational–economic mechanism, aiming to achieve practical objectives such as cost reduction, improved access to cross–border payments, and transaction security with crypto assets. The article stresses the importance of risk analysis related to cryptocurrency use and the development of risk mitigation methods through proactive management and the application of appropriate tools. The conclusions highlight the feasibility and benefits of using an organizational–economic mechanism to incorporate crypto assets into business payment processes, ensuring efficiency and adaptability of crypto assets or other alternative payment instruments. The study’s novelty lies in its contribution to the development of a mechanism for integrating cryptocurrencies into business operations, while its theoretical value is in the synthesis and clarification of key issues related to cryptocurrency acceptance in business. The proposed concept and vision of the organizational–economic mechanism to enhance the efficiency of cryptocurrency use in business payments offer valuable insights for future research and practical implementation.

The Role of Market Transparency and Regulation on Investor Protection and Risk Management in Crypto Assets in Jawa Barat

The Role of Market Transparency and Regulation on Investor Protection and Risk Management in Crypto Assets in Jawa Barat

The Impact of the Law No 4/2023 on the Development and Strength of the Financial Sector (P2SK): Is Crypto Getting Brighter?

This study aims to analyze crypto market conditions so they can formulate policy recommendations for OJK. Crypto market conditions were observed using a netnographic approach, using a total sample of 6,267 netizen comments. Data was extracted with NAWALA software, processed with NVIVO, and policy selected with MULTIPOL. The results show a better dynamic in the crypto market development in Indonesia after the issuance of the Law, even though many dynamics still occur. This study suggests that the Financial Services Authority (OJK) take different policies in 2024, 2025, and 2026 in supporting the development of crypto assets.

Transition of Crypto Asset Supervision From Bappebti to OJK

This article discusses the impact of rapid technological advancements in information and communication on the financial system, particularly the shift from cash-based transactions to non-cash payment methods and the emergence of cryptocurrencies. The increased adoption of digital currencies, such as Bitcoin and Ethereum, highlights the need for a comprehensive regulatory framework to ensure investor protection and financial stability. This study focuses on the role of Indonesia’s Financial Services Authority (OJK) in regulating cryptocurrencies, especially following the enactment of Law No. 4 of 2023, which mandates OJK’s involvement in overseeing these digital assets. The research utilizes a normative legal approach, leveraging a literature review to gather relevant literature, regulations, and legal frameworks on cryptocurrency management. Key findings reveal the existence of a dual regulatory framework involving both OJK and the Commodity Futures Trading Regulatory Agency (Bappebti), which may lead to potential conflicts and challenges in supervision. This article aims to provide recommendations for regulatory harmonization between OJK and Bappebti to enhance regulatory effectiveness and protect investors in the rapidly evolving cryptocurrency landscape. Through this analysis, the study seeks to contribute to a deeper understanding of the regulatory challenges faced by cryptocurrencies and propose policy solutions that can strengthen OJK’s role in this sector..