Digital Currency Research Articles

Legality of Bitcoin in the Perspective of Fiqh Muamalah

This study investigates the legality of Bitcoin from the perspective of Fiqh Muamalah through qualitative analysis and literature review. Fiqh Muamalah, an Islamic jurisprudential framework, regulates economic transactions according to Sharia law. The research examines whether Bitcoin, as a digital currency, aligns with Islamic legal and ethical standards by analyzing scholarly articles, religious texts, and fatwas issued by Islamic scholars. Key considerations include Bitcoin's nature as a currency, its speculative role, and potential for illicit activities. Findings reveal diverse scholarly opinions, with some viewing Bitcoin as permissible under specific conditions, while others raise concerns about its speculative nature and lack of intrinsic value. This study aims to provide comprehensive insights into Bitcoin's legality within Fiqh Muamalah, offering valuable information for policymakers, financial institutions, and Muslim investors.

The Disruption of Cryptocurrencies as a Method of Payment and Its Implications for the Financial System: Evidence from the United States

In the past decade, the emergence of Blockchain has questioned certain financial institutions. Cryptocurrency upsurge was aimed at conducting financial transactions with more efficiency while being safer, easier, faster, and cheaper. Thus, over-intermediation in finance has been highlighted by Blockchain emergence. Here, a SWOT will be carried out to examine Blockchain and cryptocurrencies, their monetary role, their impact on a financial system based on banking intermediation, and their influence on the future of central banking. About the United States, this paper concludes that cryptocurrencies will eventually spread as a method of payment, which could lead them to be the new form of money under some assumptions. The eventual adoption of blockchain technology by central banks through the introduction of official digital currencies could favor the creation of a more inclusive financial system in the future.

Digitization adoption in developing countries: Investigating the factors affecting intention to use digital currency in Vietnam

In the contemporary landscape characterized by technological advancements and a progressive economic environment, the utilization of currency has undergone a paradigm shift. Despite the growing prevalence of digital currency, its adoption among the Vietnamese population faces several challenges, including limited financial literacy, concerns over security, and resistance to change from traditional cash-based transactions. This research aims to identify these challenges and propose solutions to encourage the widespread use of digital currency in Vietnam. This research adopts a quantitative approach, utilizing Likert scale questionnaires, with a dataset of 330 records. The interrelationships among variables are analyzed using partial least squares structural equation modeling (PLS-SEM). The analysis results substantiate the viability of the research model, confirming the hypotheses. The findings demonstrate a positive relationship and the significance impact of factors such as perceived usefulness (PU), perceived ease of use (PEOU), perceived trust (PT), social influence (SI), openness to innovation (OI), and financial knowledge (FK) to intention to use digital currency (IUDC). Thereby aiming to inform policymakers, industry stakeholders, and the wider community, fostering a deeper understanding of consumer behavior and providing solutions to enhance the adoption of digital currency in the evolving landscape of digital finance.

The single supranational BRICS digital currency as a factor of independence from the dollar-centric international financial system

The single supranational BRICS digital currency as a factor of independence from the dollar-centric international financial system

Blockchain technology in financial services: enhancing security, transparency, and efficiency in transactions and services

Blockchain technology revolutionizes financial services by enhancing security, transparency, and efficiency in transactions and services. This paper examines the fundamental aspects of blockchain, including its core concepts and components, and explores its application in financial services. Blockchain's cryptographic hashing, decentralization, and immutability significantly improve security by preventing tampering and reducing fraud risks. Increased transparency through immutable audit trails, real-time updates, and open ledgers fosters trust among customers, regulators, and institutions. Furthermore, blockchain streamlines operations by automating processes, reducing intermediaries, and expediting transactions, resulting in substantial cost reductions and improved efficiency. Despite these advantages, challenges such as scalability, interoperability, regulatory uncertainty, and environmental impact must be addressed for widespread adoption. The prospects of blockchain in financial services are promising, with potential applications in decentralized finance, digital identity verification, and central bank digital currencies. This paper underscores the transformative potential of blockchain technology in creating a more secure, transparent, and efficient financial ecosystem.

Perlindungan Hukum dan Kebijakan Tarif Pajak terhadap Trader Crypto di Indonesia

Cryptocurrency investment in Indonesia has become an increasingly popular topic as people's interest in digital assets increases. Although there is potential for huge profits, there are also risks that need to be considered. The Indonesian government takes a cautious stance in regulating cryptocurrencies. Clear regulations still do not exist, although in 2019, the Commodity Futures Trading Supervisory Agency (BAPPEBTI) issued regulations recognizing cryptocurrencies as commodity futures that can be traded on futures exchanges. Bank Indonesia has issued a statement reminding the public of the risks associated with the use of digital currencies, but there has been no outright ban on their use. There are also concerns regarding the misuse of cryptocurrencies for illegal purposes, such as money laundering and terrorism financing, which are continuously monitored by governments and financial regulatory agencies. Despite regulatory uncertainty, interest in cryptocurrencies continues to grow in Indonesia, and more and more companies and individuals are interested in understanding and using this technology.

Central bank digital currencies – a bibliometric analysis on research themes in pursuit of research trends

Central bank digital currencies – a bibliometric analysis on research themes in pursuit of research trends

Perlindungan Hukum dan Kebijakan Tarif Pajak Terhadap Trader Crypto di Indonesia

Cryptocurrency investment in Indonesia has become an increasingly popular topic as people's interest in digital assets increases. Although there is potential for huge profits, there are also risks that need to be considered. The Indonesian government takes a cautious stance in regulating cryptocurrencies. Clear regulations still do not exist, although in 2019, the Commodity Futures Trading Supervisory Agency (BAPPEBTI) issued regulations recognizing cryptocurrencies as commodity futures that can be traded on futures exchanges. Bank Indonesia has issued a statement reminding the public of the risks associated with the use of digital currencies, but there has been no outright ban on their use. There are also concerns regarding the misuse of cryptocurrencies for illegal purposes, such as money laundering and terrorism financing, which are continuously monitored by governments and financial regulatory agencies. Despite regulatory uncertainty, interest in cryptocurrencies continues to grow in Indonesia, and more and more companies and individuals are interested in understanding and using this technology.

Acceptance of IoT-based E-coin Track-and-trace: A Case of the Digital Euro Project in Italy

As the world becomes increasingly digitalised, there are growing concerns about the use of big data and machine learning techniquesto monitor and control citizens’ spending habits. This is particularly the case regarding Central Bank Digital Currencies (CBDC), whichare being trialled by an increasing number of countries. There is a perception that such currencies could violate privacy due to thecentralisation of money liability. The aim of this research is to assess whether a universal e-coin level tracking service of money and public expenditures, available to everyone and inspired by Internet of Things (IoT) architectures and standards, could instil trust ininstitutions while increasing the acceptance of CDBCs. The research methodology comprises three key elements: (i) the conceptualisation and implementation of an IoT-based CBDC, (ii) a qualitative, technical and compliance assessment with regard to the specific reference to the Digital Euro (D€) project, and (iii) a survey we conducted among 351 respondents to ascertain the potential for CBDC acceptance within Italy. The results demonstrate that the prototype is a viable concept despite storage limitations. Furthermore, 73.83 percent of respondents who initially expressed scepticism indicated that they would be more inclined to adopt the CDBC instrument if a universal track-and-trace tool of money were made available.

Presenting a new deep learning-based method with the incorporation of error effects to predict certain cryptocurrencies

In recent years, with the emergence of blockchain technology, we have witnessed a remarkable increase in the use of digital currencies. However, investing in the digital currency market carries a high level of risk due to the market's erratic behavior and high price fluctuations. Consequently, the need for an appropriate model for intelligent prediction and risk management is perceived. Motivated by the above subject, we propose a novel approach based on a deep neural network with a focus on error patterns. The proposed approach is based on the theory of non-random walks and assumes that there are predictable components in the price movements of cryptocurrencies. This new approach attempts to improve prediction results by modeling residual values and incorporating their impact on the main predictions. The time scope of this research is from October 31, 2018, to December 30, 2023, on a daily basis, spanning Five years. In this study, we utilized Long Short-Term Memory (LSTM) as the main prediction model and Vector Autoregression (VAR) for forecasting noise in three well-known cryptocurrencies: Bitcoin, Ethereum, and Binance Coin (BNB). The results indicate that the proposed approach has been able to enhance the predictions.

International Regulatory Experience and Enlightenment on Non-Legal Tender Digital Currency from the Perspective of the Kame Framework

Based on the current imperfect regulatory system for non-legal digital currencies in China, this article focuses on the regulation of non-legal digital currencies, exploring regulatory paths and models suitable for Chinas national conditions based on the regulatory experiences of typical foreign countries. The renowned law and economics theory frameworkthe Coase-Meade frameworkis adopted to analyze the overall regulatory model of non-legal digital currency regulation abroad. Firstly, based on the applicability value of the Coase-Meade framework to the subject of this study, typical countries such as Germany, the United States, the United Kingdom, Japan, and South Korea are analyzed under the Coase-Meade frameworks prohibition and transaction rules, property rules, and liability rules to clarify their legal characterization of non-legal digital currencies and explore regulatory paths in terms of legal, financial, and technological regulation. Next, the characteristics of foreign regulatory models are reviewed, including scenario-based regulation, centralized regulation, and categorized regulation. Finally, drawing on Chinas current prohibition stance and overseas practical experience, the article preliminarily clarifies the legal attributes of non-legal digital currencies. Then, it constructs a regulatory framework suitable for the country from the perspectives of principles, priorities, and methods based on the chosen paths of typical countries. Additionally, it emphasizes the clarity of regulatory responsibilities for regulatory agencies and the establishment of other self-regulatory bodies to enhance the coordination of domestic regulatory entities. Furthermore, it actively explores international cooperation to strengthen international coordination in regulation, enhancing Chinas international influence and discourse power.

E-Rupee: Unlocking India's Digital Economy, Challenges, and Opportunities

This paper explores the concept of digital currency, differentiating between digitization and digitalization, and analyzes its different forms, specifically centralized and decentralized digital currencies. The analysis comprehensively examines Central Bank Digital Currencies (CBDCs), specifically focusing on India's e-rupee. It delves into the various forms of CBDCs, their management strategies, and the potential economic consequences they may have. The significance of digital currency in promoting financial inclusion, improving transaction efficiency, and influencing monetary policy is emphasized. Moreover, the study discusses the difficulties and dangers linked to the deployment of digital money, such as cyber-attacks, financial instability, privacy issues, and regulatory obstacles. The paper emphasizes the significance of strong risk management systems and consistent monitoring to guarantee the efficiency and safety of digital currencies. This study offers unique insights into the revolutionary potential of digital currencies and the strategic considerations required for their effective adoption by conducting a thorough assessment of the digital currency ecosystem. Moreover, the emergence of the 4th Industrial Revolution (4.0), driven by digital technologies, is transforming industries on a global scale within the field of agriculture, digitalization is transforming farming methods by implementing smart farming, precision agriculture, and digital agriculture. This paper also provides the guidelines for mitigating operational risks associated with digital currency, which may be found in the NIST Risk Management Framework and the CPMI-IOSCO Principles for Financial Market Infrastructures. Ultimately, the embrace of digital currencies and the digitization of numerous industries have the potential to stimulate economic growth, enhance financial accessibility, and proper technological advancement.

Characteristics and Development Trends of the Digital Assets Segment in Modern Practice in Russia and Abroad

The paper aims to identify the key trends and risks associated with the introduction and spread of digital assets, including the digital ruble, in the Russian financial market. This study is timely due to the rapid growth of market capitalization for digital financial assets based on blockchain technology in both international and Russian financial markets, as more and more countries prepare to launch their own national digital currencies. However, there is a dearth of information in scientific and practical literature regarding the prospects, challenges, and risks associated with introducing digital financial assets, including the digital ruble, into Russia. The data for the analysis included official statistics and analytics from the Bank ofRussia and central banks of countries considering introducing digital national currencies. It also included the content of key Russian legislative acts related to digital currencies, as well as examples of the implementation of digital financial assets from Russian and international practices. The main research methods employed were a systematic approach, analysis of fundamental theoretical propositions in the literature, and case analysis. The paper discusses the existing types of digital financial assets, both internationally and in Russia, and assesses the demand for these assets in the Russian capital market, as well as their potential for lending to small and medium-sized businesses. It also considers the most common problems associated with the development of this segment and possible solutions, including regulatory measures. The second part ofthe paper explores the prospects and challenges of introducing a digital ruble into the Russian financial system. It assesses the potential impact of this new currency on the stability of domestic banks and monetary conditions in Russia, including inflation. Future research could focus on quantifying a wide range of risks associated with the introduction of digital financial assets, as well as modelling supply and demand for these assets.

A multi-jurisdictional perspective: To what extent can cryptocurrency be regulated? And if so, who should regulate cryptocurrency?

This article addresses the need for effective cryptocurrency regulation considering its volatile nature, recent investment surges, and subsequent financial crashes. It explores various approaches to cryptocurrency regulation, examining different jurisdictions’ approaches towards cryptocurrency’s classification as a security, commodity, or property. For countries to efficiently regulate the global threat that cryptocurrency has the potential to be, regulatory methods that are currently being used on a domestic scale need to be addressed and evaluated for international effectiveness. The article begins by defining cryptocurrency and reviewing the recent events that have intensified the regulatory race, such as crypto crazes and crypto crashes. It analyses different regulatory approaches, highlighting which countries view cryptocurrency as a security, commodity, or property, and examines the necessity for international harmonisation. It then examines the introduction of Central Bank Digital Currencies, evaluating it as the potential step forward and identifying the impact it could have.

Challenges and Prospects of Establishing Accounting Treatment Standards for Digital Currency

Digital Currency have emerged as a disruptive force in the financial world, challenging traditional accounting practices and regulatory frameworks. This study examines the challenges and prospects for establishing accounting standards for Digital Currency. Initially conceived as a secure medium of exchange, Digital Currency have evolved into assets that can be exchanged for goods or services. However, their dual role as currencies and commodities presents a classification dilemma. Current accounting standards primarily classify Digital Currency as intangible assets, but their rapid appreciation renders historical cost measurement ineffective. Adopting fair value measurement emerges as an optimal solution, but practical hurdles remain. Through insights from existing literature and analysis, this study optimizes accounting approaches for Digital Currency, addressing challenges such as asset valuation, regulatory inconsistencies, diverse investor perspectives, and legal uncertainties. Establishing standardized and transparent accounting practices tailored to Digital Currency is critical to ensuring transparency, consistency, and reliability in financial reporting.

Privacy implications of central bank digital currencies (CBDCs): a systematic review of literature

This study employs a systematic review of the literature to critically analyze the privacy implications of central bank digital currencies (CBDCs). Against the backdrop of a global digital revolution spurred by financial crises and the rise of cryptocurrencies, the emergence of CBDCs has garnered substantial attention from central banks worldwide. The study’s main objective is to fill a significant gap in the literature by providing an evidence-based assessment of the privacy issues of CBDCs. Through a meticulous analysis of the 46 selected papers, the study identifies key findings, including diverse perspectives on CBDC models, aspects and gaps in CBDC research, and various privacy concerns, such as extensive data collection in the direct CBDC model, challenges related to central bank data retention in the hybrid CBDC model, and increased operational complexity in the intermediated CBDC approach associated with CBDC implementation. The critical analysis points toward the urgent need for more extensive research into the privacy and security aspects of CBDCs to ensure user protection and trust. The findings contribute valuable insights for policymakers, regulators, and stakeholders in shaping the responsible creation and use of CBDCs.

CBDC and the Banking System

Abstract This paper examines the potential impact a central bank digital currency (CBDC) on banks’ balance sheets. We first analyze the possible implications of the introduction of a CBDC for the banking system and the economy as a whole. Our analysis indicates that the impact of a CBDC depends on a number of design choices and on how credit institutions re-optimize their balance sheets in response to the outflow of deposits caused by the substitution of private money with public digital money. We then present a series of illustrative simulations on the impact of a CBDC on the funding structure and profitability of credit institutions using data on Italian banks between June 2021 and March 2023. The analysis suggests that the overall impact on banks’ funding could be manageable in the presence of individual holding limits and in an environment characterized by ample liquidity and stable funding for credit institutions. The cost of covering the reduction of deposits would be relatively higher for intermediaries with low excess reserves and for those that may need to issue long-term liabilities to maintain stable funding levels above regulatory requirements.

Digital currency, digital ruble and electronic money in Russian Civil Law: problems of correlation

The article compares digital currency with the digital ruble and other non-cash funds (on bank accounts as well as electronic money) and justifies their different civil law nature that, due to the use of the common digital characteristic in their names, leads to their confusion, but not to the clear distinction among them. In order to ensure digital currency with the necessary civil law treatment, it is concluded that it be recognized as property in civil law. By analogy with intellectual property, it is argued to distinguish between an intangible object – a digital sign (digital code, token) and a civil legal right to be acknowledged in law for it. From this point of view, given the absence of a debtor in an obligation, digital currency in Russian Civil Law should be treated as an absolute digital right and regulated in details in the current civil legislation regarding the order of its appearance, implementation (disposal), transfer, lien, termination, and protection.

High-Frequency Quantitative Trading of Digital Currencies Based on Fusion of Deep Reinforcement Learning Models with Evolutionary Strategies

High-frequency quantitative trading in the emerging digital currency market poses unique challenges due to the lack of established methods for extracting trading information. This paper proposes a deep evolutionary reinforcement learning (DERL) model that combines deep reinforcement learning with evolutionary strategies to address these challenges. Reinforcement learning is applied to data cleaning and factor extraction from a high-frequency, microscopic viewpoint to quantitatively explain the supply and demand imbalance and to create trading strategies. In order to determine whether the algorithm can successfully extract the significant hidden features in the factors when faced with large and complex high-frequency factors, this paper trains the agent in reinforcement learning using three different learning algorithms, including Q-learning, evolutionary strategies, and policy gradient. The experimental dataset, which contains data on sharp up, sharp down, and continuous oscillation situations, was chosen to test Bitcoin in January-February, September, and November of 2022. According to the experimental results, the evolutionary strategies algorithm achieved returns of 59.18%, 25.14%, and 22.72%, respectively. The results demonstrate that deep reinforcement learning based on the evolutionary strategies outperforms Q-learning and policy gradient concerning risk resistance and return capability. The proposed approach offers a robust and adaptive solution for high-frequency trading in the digital currency market, contributing to the development of effective quantitative trading strategies.

Fuzzy Clustering Algorithm for Trend Prediction of The Digital Currency Market

Digital currencies, such as Bitcoin (BTC), Litecoin (LTC), Ethereum (ETH), Stellar (XLM) and Tether (USDT), have been attracting the interest of investors and speculators. Over the last several years, the exponential growth in the value of digital currency has captured the interest of many individuals who see it as an attractive investment opportunity. After all, investors must deal with the expected volatility of Bitcoin prices as part of their investments. The future development of cryptocurrency can be challenging to forecast because of the extreme unpredictability and disorder of external events. In this research, fuzzy models for cryptocurrency price forecasting using a level set-based Fuzzy Clustering Based on Multi-Criteria Decision-Making (FC-MCDM). Compared to linguistic and functional fuzzy clustering, the construction and processing of fuzzy rules in a multi-criteria decision-making-based collection set differ. Based on level sets, the model produces the weighted average of the functions that active fuzzy rules provide as output. In the model's outputs, the activation levels of the fuzzy rules are represented directly by the output functions. Computational experiments are carried out to test the efficacy of the level-set approach for one-step-ahead prediction of cryptocurrency closing prices. Meanwhile, level set-based fuzzy clustering outperforms the other methods when the direction of price change evaluates performance