Baltic Journal of Economic Studies (Sep 2024)
VIRTUAL ASSETS IN THE DIGITALIZATION ERA: ECONOMIC AND PRIVATE LEGAL ASPECTS
Abstract
Virtual assets have become an integral part of the modern digital economy. Their development and proliferation create new opportunities and challenges for economic and legal systems. At the same time, their proliferation raises several economic and legal issues that require urgent resolution. These include ensuring the security of transactions, protecting the rights of owners of virtual assets, developing effective regulatory mechanisms and addressing financial market risks. Addressing these issues is essential to ensure the stable and sustainable development of the digital economy and to adapt legal systems to the new realities. The research subject focuses on virtual assets in the modern digital economy, covering their development, proliferation and the resulting economic and legal implications. The study looks at different types of virtual assets, including cryptocurrencies, tokens, central bank digital currencies (CBDCs), and virtual goods and services. It aims to understand the economic benefits, such as transaction efficiency, financial inclusion and investment opportunities, as well as the risks and challenges, such as high volatility, regulatory complexity and security concerns. The primary purpose of this study is to provide a comprehensive analysis of virtual assets in the context of digitalisation, in particular from the economic and legal perspectives. This involves studying the impact of virtual assets on the modern economy and legal systems and identifying the necessary adjustments to ensure their stable and sustainable development. The methodology of this study includes doctrinal analysis, comparative methods and legal policy analysis. Doctrinal research involves the systematic study of existing laws, regulations and legal principles relating to virtual assets. The comparative method is used to analyse and compare different regulatory approaches in different jurisdictions, identifying best practices and potential pitfalls. Legal policy analysis helps to assess the effectiveness of current policies and propose new regulatory mechanisms to better regulate virtual assets. Using these methods, the study provides a thorough understanding of both the economic benefits and the legal intricacies associated with virtual assets. The paper analyses different types of virtual assets, including cryptocurrencies, tokens, central bank digital currencies (CBDCs), and virtual goods and services. It examines the economic benefits of using virtual assets, such as fast and low-cost transactions, financial inclusivity and investment opportunities, as well as the risks, including high volatility, regulatory challenges and security concerns. The legal aspect of the study includes an analysis of different approaches to the regulation of virtual assets in different countries, property rights and taxation issues. The study also assesses the prospects for the development of this sector and its impact on traditional financial systems. The study concludes that virtual assets play a key role in today's digital economy, offering significant benefits such as fast and cost-effective transactions, increased financial inclusion and new investment opportunities. However, these benefits are accompanied by significant risks, including high market volatility, regulatory hurdles and security issues. The legal analysis reveals a variety of regulatory approaches to virtual assets, highlighting the need to harmonise international standards to protect property rights and ensure fair taxation. The research highlights the importance of developing a robust legal and regulatory framework to manage the risks associated with virtual assets, while fostering their potential to revolutionise the financial sector. It suggests that policymakers and regulators should focus on creating adaptable legal systems that can keep pace with technological advances. By addressing these challenges, the digital economy can achieve stable and sustainable growth and ensure that both economic and legal systems are well equipped to deal with the evolving landscape of virtual assets.
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