Legal regime of cryptocurrencies
| Autor | Kristina Proskurina, Yevgeniy Porokhov |
| Cargo | Doctoral Student at the Adilet Law School, Caspian University, Almaty, Republic of Kazakhstan / Full Doctor of Law, Professor at the Adilet Law School, Caspian University, Almaty, Republic of Kazakhstan |
| Páginas | 239-277 |
Legal Regime of Cryptocurrencies (p. 239-277) 239
PROSKURINA, K; POROKHOV, Ye.
Legal Regime of Cryptocurr encies
.
The Law, State and
Telecommunic ations Review
, v. 16, no. 1, p. 239-277, May 2024.
Legal Regime of Cryptocurrencies
Submitted
: 4 Novemb er 2022
Kristina Proskurina*
https://orcid.org/0000-0002-4479-8398
Yevgeniy Porokhov**
https://orcid.org/0000-0002-6758-1730
DOI: https://doi.org/10.26512/lstr.v16i1.45592
Reviewed
: 8 June 202 3
Revised
: 10 July 20 23
Accepted
: 13 July 20 23
Article submitted to peer blind rev iew
Licensed under a Creative Common s Attribution 4.0 International
Abstract
[Purpose]
The purpo se of this research is to examine the legislative appr oaches to
regulating cr yptocurrencies in dif ferent states and re gions. The aim is to analyze the leg al
framework of cryp tocurrencies i n the Kazakh and international economy and determine
the modern sc ientific approaches used in their functioning.
[Methodology/A pproach/Design]
The study em ploys a combination of theoretical an d
empirical methods, including analysis, synthesis, historical analysis, comparative
analysis, f ormal-logical method s, and hermeneutic s. A comparative analysis is condu cted
to assess the different regulatory ap proaches of state s towards cryptocurrencie s and
evaluate the ju stification for terms such as "digital cur rency" and "digital asse t."
[Findings]
The findin gs of this study underscore the n ecessity for furthe r amendments to
the legislation i n Kazakhstan, specifically a ddressing overlooked detai ls and features
concerning the financia l and legal aspects of cryptocurrencies. Key decisi ons need to be
made regardin g their acceptance for publ ic payments, tax considera tions, declaration
requirements , and recognition as priva te money. The study emp hasizes the significance of
adopting a compreh ensive and forward-thinkin g legal approach that supports the full
legalization of cryptocurrencies while establishing a robust regulatory framework. This
approach would effectively safeg uard the intere sts of indiv iduals a nd en tities, a ddress
concerns, and promote a balanced and secure environment.
Keywords
: Cryptocurrenc y. Digital Currency. Electronic Mone y. Property. Financial
Instrument. V irtual Asset. Private Mone y.
*
Kristina Proskurina is a Doctoral Student a t the Ad ilet Law School, Caspian University,
Almaty, Repu blic of Kazakhstan. E- mail: proskurinakristina1 2@gmail.com.
**
Yevgeniy Porokhov is a Full Doctor of Law, Professor at the Adilet Law Schoo l,
Caspian Unive rsity, Almaty, Republic of Kazakhstan. E-ma il: yporokhov@yahoo.co m.
240
Legal Regime of Cryptocurrencies (p. 239-277)
PROSKURINA, K; POROKHOV, Ye.
Legal Regime of Cryptocurr encies
.
The Law, State and
Telecommunic ations Review
, v. 16, no. 1, p. 239-277, May 2024.
INTRODUCTION
The cryptocurrency first appeared in 2009 as an alternative means of
payment to state money and a means of circulation of goods (works, services),
possessing a number of distinctive properties that were recognised by supporters
of the cryptocurrency as its un doubted advantages. Considering this new
economic phenomenon abstractly, regardless of its legal regime under the
legislation of any state, cryptocurrency is very similar to private (commodity)
money that once served as a commodity exchange. Cry ptocurrency is an
innovative technical solution with a claim to create competition for the money of
the state and its monetary monopoly, it is an expression of the desire of a part of
humanity for freedom and independence from the state in every thing, including
money (TOVMA, 2013). Cryptocurrencies highlight society's growing distrust
of state money and monetary policy, signalling the need for the state, law, and
politics to adapt to new societal and economic phenomena.
In the first stages of its development, cryptocurrency (also referred to as
"digital currency") was perceived doubtfully, an d a successful future was not
predicted for it. Overcoming initial scepticism surrounding cryptocurrency
required significant efforts. The digital nature of cryptocurrency, absence of
government backing, and reliance on unfam iliar technology like blockchain
questioned using such technology. Security concerns, limited infrastru cture, and
regulatory uncertainties further hindered widespr ead adoption. People found it
challenging to trust and use a currency that existed solely in the digital realm
without a centralized authority. Today, cryptocurrency plays such a big role in
the global economy th at to preserve its monetary monopoly and prevent the
global decentralisation of monetary systems, states ar e introducing state digital
money into cir culation (KERIMKHULLE et al., 2023). Many conservative
representatives of the modern scientific community adhere to the position that
cryptocurrency should either be ignored or banned. Such a position is mainly
explained not by the fact that cryptocurrency does not perform the fun ctions of
money and its legal reg ulation is useless or would damage the economy of the
state, but by the real fear that it may become serious competition fo r state money
(SILAGADZE, 2022). In this regard, countries around the world are introducing
national digital currencies that would not allo w breaking the state monetary
monopoly and ousting public money from civil circulation. Venezuela became
the first country to launch its own state cryptocurrency "petro", secured,
according to the Presiden t of this country, with reserves of gold, oil, gasoline,
and diamonds (DOLGIYEVA, 2018; EGOROVA and EFIMOVA, 2019).
In 2020, China began testing the digital yuan (FOMIN, 2020b), and in
the Russia, a full-scale study is being conducted on the future of the digital form
Legal Regime of Cryptocurrencies (p. 239-277) 241
PROSKURINA, K; POROKHOV, Ye.
Legal Regime of Cryptocurr encies
.
The Law, State and
Telecommunic ations Review
, v. 16, no. 1, p. 239-277, May 2024.
of the rouble, possible technical solutions, the legal regime of the digital rouble,
and its place in the system of objects of civil and financial law (DIGITAL
RUBLE…, 2020). In 2021, the Republic of Kazakhstan also seriously
considered the need to introduce the digital form of the Kazakh stani tenge into
circulation. This initiative was marked by the publication by the National Bank
of the Republic of Kazakhstan of the Digital tenge (pilot project) (2021). The
publication of this Report sharply raised such questions as the legal regime of
non-cash money, their difference from electronic money, the place th ey occupy
in the monetary system of the state, their dif ference from cryptocurrencies, and
whether they would make it a worthy competition.
The purpose of this research is to explore the diverse legislative
approaches adopted by individual states and regions regarding the legal
framework of cryptocurrencies, as well as to analyze contemp orary scientific
perspectives on the legal nature and functioning of cryptocurrencies within the
Kazakh and international economies. The study aims to examine the regulations
governing the monetary system, civil law, and financial law, investigate the
legal definition of "cryptocurrency," and analyze the current legislation of
Kazakhstan and Russia concerning the regulatio n an d circulation of
cryptocurrencies (digital currency, digital assets). Th e research seeks to
investigate the implications of cryptocurren cies as alternative payment and
circulation methods, including their potential to disrupt state monetary
monopolies. It aims to analyze the changing societal and econ omic landscape
surrounding cryptocurrencies and explore the implications for state governance,
law, and politics in adapting to these emerging phenomena.
The following tasks are set to achieve such goal:
• The examination of regulations of various states on the legal
foundations of the monetary system, the system of objects of civil law
and financial law;
• The investigation of scientific approaches to the legal definition of the
term "cryptocurrency" and the establishment of its legal nature;
• The analysis of the current legislation of the Republic of Kazakhstan
and the Russia for legal regulation issues and circulation of
cryptocurrencies (digital currency, digital assets).
MATERIALS AND METHODS
A legal an alysis was conducted on the legal literature and regulations
considering the circulation of cry ptocurrencies as an object of civil and financial
legal relatio ns and the legal foundations of the monetary system at the present
stage of economic and social development. The civil and tax legislation of other
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