Burkovska A.,PhD (Economics), Associate Professor of the Department of Finance, Banking and Insurance, Mykolayiv National Agrarian University, Mykolayiv, Ukraine

ORCID ID: 0000-0003-4158-1721
e-mail: burkovskaya@mnau.edu.ua

Lyashchenko N., applicant for higher education, Mykolaiv National Agrarian University, Mykolaiv, Ukraine

e-mail: vyrda96@gmail.com

The Role of Cryptocurrencies in Financial and Economic Systems

Introduction. The article is devoted to the actual problem of cryptocurrency functioning in the world market and its place in financial and economic systems. The emergence of virtual money (cryptocurrency) is driven by the constant development of technology and the economy. Currently, non-cash payments are more common. Cryptocurrency is becoming an innovative form of payment in the information society. Unlike traditional types of money, it can be a means of payment in electronic payment systems with a high level of protection against cybercrime. Every day, cryptocurrency is strengthening its role not only as a way of saving, but also as a means of payment in electronic payment systems.

Purpose. The main purpose of the study is to determine the place and role of cryptocurrency in financial and economic systems.

Results. The experience of implementing and using cryptocurrencies and models of their regulation have been investigated, on the example of European countries. It has been found that the functioning of cryptocurrencies is a new challenge for government regulators of financial services markets. The cryptocurrencies most popular by their capitalization are compared. The strengths and weaknesses of virtual money, and the threats and prospects of their use in the financial and economic world market are identified. Further perspectives on the use of cryptocurrency at the country level and the ways to improve its position in the world economic system were substantiated.

Conclusions. Analysed data in this article makes it possible to determine what a cryptocurrency is and its role in the financial and economic system. Cryptocurrency is a fairly new concept that has adapted to the current financial and credit system and is constantly evolving. Digital money has a future as it is very convenient not only for the average person but also for the whole country. It is possible to remove the drawbacks by developing effective laws regarding the use of cryptocurrency and the regulation of the rights and obligations of its users. In the future, thanks to transaction transparency and protection against virtual currency fraud, it can significantly reduce the level of corruption, drug business and the percentage of the shadow economy.

Keywords: cryptocurrency; blockchain; fiat money; virtual currency; bitcoin; cashless payments; electronic money.

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