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Cryptocurrencies at the Modern Stage of the Evolution of Money

Cryptocurrencies at the Modern Stage of the Evolution of Money

Journal of Economic Regulation, , Vol. 10 (no. 4),

The monetary system is constantly evolving, and in the digital age, the next stage in the currency system is cryptocurrency technology. The study presents a comparative analysis of cryptocurrencies and various types of money, and also considers the theoretical aspects of the functioning of cryptocurrency as a new form of money. The article shows that cryptocurrencies currently do not have a generally accepted definition and a comparative analysis revealed that the future definition of cryptocurrencies should be focused on their similarity to fiat money and their private form. Cryptocurrencies are also analyzed from the point of view of their fulfillment of the functions of money and from the point of view of compliance with the characteristics of generally accepted money. On the example of Bitcoin, the study showed that at the moment not all the functions of money are performed and there is a mismatch with the property of stability, due to the high volatility of the cryptocurrency. Thus, the alleged concept that affects cryptocurrency volatility has been identified, and coefficients have been calculated that show the expected effect on the decrease in cryptocurrency volatility. The results of the study showed that theoretically cryptocurrency is able to function as a new form of money and is the next stage in the evolution of money. It is concluded that if cryptocurrencies are fully recognized by states as money, then it is worth focusing on the transformation of the functions of money.

Keywords: Cryptocurrencies; Bitcoin; money; money evolution

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