Institutional Basis of Cryptoassets’ Regulation

The article delves into the institutional underpinnings of cryptoasset regulation, asserting that institutional relations and connections among entities extend beyond formal and informal norms and rules. These are complemented by the formation of relevant institutions and organizational relations between them, thereby shaping the institutional environment. This environment consists of the legislative and regulatory framework and the socio-economic mechanisms for regulation, all aimed at achieving collective benefits. The proposal is to view the institutional and economic relations in cryptoasset regulation as encompassing areas such as the protection of cryptoasset ownership rights, state regulation of cryptoasset circulation on markets and exchanges to ensure the industry’s full functionality, and the management of organizational and economic relations within the cryptomarket. Given the varied stances of countries towards cryptoassets, identifying clear regulatory trends is challenging. The article categorizes countries into four groups based on their regulatory approach to cryptoassets: centralized, decentralized, restrictive, or prohibited. Analyzing the regulatory practices in these groups allows for certain conclusions, notably that despite cryptocurrencies being commonly contrasted with fiat money, there’s a noticeable shift towards recognizing cryptoassets’ viability parallel to national currencies. The conclusion drawn from the analysis is that a unified global regulatory framework for cryptocurrencies has yet to emerge. However, national and international institutions are making significant strides in this domain, offering recommendations and standards for cryptoasset regulation aimed at mitigating associated transactional risks. Key recommendations include incorporating FATF-prescribed global principles and approaches into national laws, employing specific tools for national regulators to control and monitor risks (particularly concerning electronic wallets and exchanges, as well as financial institution risks), and enhancing international cooperation in supervising and implementing restrictions on cryptoasset circulation.