Cryptocurrencies and Approaches to Their Regulation

It should be recognized that the monetary authorities in all countries of the world were not ready for the emergence and rapid development of digital currencies and their virtual diversity, regardless of the development level of national economy and domestic financial market. Minimization of the threats and risks of crypto-currency spread based only on their smaller issue volume comparing to fiat money is at any rate a shortsighted position. The interpretation of this phenomenon by a central bank has a decisive influence on its policy, which is especially important in the context of financial system globalization. The article provides the analysis of approaches to interpretation of the virtual (digital) currency concepts in central banks of different jurisdictions, as well as a wide range of scientific publications. These data led to the conclusion that it is necessary to develop a common understanding of state regulation in this field at the global level. According to the author, the most reasonable method is the interpretation of digital currencies as an asset, which is due to the inferiority of these financial instruments in terms of money key functions in the classical sense. The author notes the significant progress of central bankers in understanding the nature and capacity of a crypto currency with dominant tendency to strengthen control and supervision over operations with these financial instruments. However, there is also a significant divergence in the development of restrictive, permissive or supportive measures. The article concludes that it is necessary to coordinate the efforts of central banks with governments, other financial bodies and international organizations in this direction in order to adequately and homogeneously react to the development of the crypto currency as a kind of financial innovation without violation of the healthy competition rules in the payment services market and to prevent investorsŐ exposure to excessive risk.