THE THEORETICAL PREREQUISITES OF THE CRYPTOCURRENCY

Abstract

The stages of formation and theoretical background of cryptocurrency have been
explored in the article. It has been established that the focus of the operation and use of such a specific financial asset is the protection of cash against the depreciation that
occurs during political and economic fluctuations. But this is another kind of modern
money, namely, stalk line. The main processes that have taken place in the IT field,
which has influenced the further development of the monetary system worldwide have
been reflected in the article. There is no unified system in the EU for cryptocurrency
transactions. The technologies used to create any kind of cryptocurrency have been
researched by the scientists of the advanced countries in the last century. Nowadays,
modern blockchain technology is an improvement of the past. Each country has its own
peculiarities and approaches to the recognition or non-recognition of cryptocurrency.
The problem with the use of modern money is to determine the issuer. Cryptocurrency
and electronic money have some things in common and distinctive. It has been
determined that the use of cryptocurrency for the purposes of storing savings and
payments is gaining popularity despite the problems of economic, tax and legal
regulation. The market capitalization of bitcoin is compared with the leading economies
of the world. Bitcoin capitalization is found to be higher than some countries' GDP. The
basic aspects of cryptocurrency functioning are revealed. The main method of scientific
research is the empirical method, which allowed to make several observations on the
changing attitude of countries to cryptocurrency. The measurement process made it
possible to understand the volume of the bitcoin market. As a result of scientific
literature, cryptocurrency as electronic money is found to be a non-personalized
payment instrument and is rotated outside the banking system electronically, which is
why it implies that the state cannot control this process, which is why national banks of
many countries with distrust treat that kind of money. The countries of the world, at
their discretion, make changes in tax and legal law.