Cryptocurrency and Its State of Research

Abstract

This article maps the existing academics and working papers about cryptocurrency, or digital currency that uses blockchain. Cryptocurrency is one of the applications of blockchain that can accelerate economic digitalization within countries, which in the end could improve economic efficiency, effectiveness, and access for citizens. By the type of issuers, cryptocurrencies can be placed into three categories: central bank-issued digital currency, private institution digital currency, and peer-to-peer crypto-assets. The advent of cryptocurrencies requires strong regulatory frameworks to protect the users, ethics guidelines to direct the development, risk benefits study to identify pitfalls, users’ psychology, law enforcement guidelines to ensure a safe environment, and economic initiatives to provide society with maximized benefits. This paper shows research findings, methods, and future research directions in cryptocurrency.

Full text

Cryptocurrency and Its State of Research
International Dialogues on Education – Volume 9 Issue 1 – July 2022 – https://idejournal.org 151
Cryptocurrency and Its State of Research
Gatot Gunarso and Stephanie
Department of Management, Faculty of Economics and Business, Universitas Kristen Krida Wacana,
Indonesia
Abstract
This article maps the existing academics and working papers about cryptocurrency or digital currency
that uses blockchain. Cryptocurrency is one of the applications of blockchain that can accelerate
economic digitalization within countries, which in the end could improve economic efficiency,
effectiveness, and access for citizens. By the type of issuers, cryptocurrencies can be placed into three
categories: central bank-issued digital currency, private institution digital currency, and peer-to-peer
crypto-assets. The advent of cryptocurrencies requires strong regulatory frameworks to protect the
users, ethics guidelines to direct the development, risk benefits study to identify pitfalls, users’
psychology, law enforcement guidelines to ensure a safe environment, and economic initiatives to
provide society with maximized benefits. This paper shows research findings, methods, and future
research directions in cryptocurrency.
Keywords: cryptocurrency, digital currency, digitalization, blockchain
Author Note
Gatot Gunarso 0000-0001-7447-6931
Stephanie 0000-0003-2704-9552
We have no known conflict of interest to disclose.
Correspondence concerning this article should be addressed to Gatot Gunarso, Faculty of
Economics and Business, Universitas Kristen Krida Wacana, Indonesia.
Email: gatotgunarso@ukrida.ac.id.

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Cryptocurrency and Its State of Research
Financial technology (fintech) is an industry that grows rapidly and has a high
compound annual growth rate (CAGR) (CB Insights, 2019). Fintech is the future of the
financial industry, by which consumers and businesses can access financial services and
products digitally, innovative market participants can deploy new innovative technologies,
and existing business models can upgrade their capacities and capabilities to fulfill consumers'
needs. Fintech helps consumers and businesses handle the impact of the Covid-19 pandemic.
To integrate digital technology innovations into people’s lives, users need to feel long-
lasting valuable effects. To sustain this integration, firms must gain sustainable competitive
advantages. Fintech refers to the financial service companies that dominantly use information
technologies in their operation to deliver their products to serve consumers. Fintech
companies offer financial services and products that are entirely or mostly in the information
technologies domain, and those services or products are difficult or impossible to perform in
conventional business because of the limitations in infrastructure.
Authorities see fintech as a means to increase financial inclusion for consumers and
encourage companies to innovate processes, services, and products. Fintech helps reduce
costs, increase the reachability of customers, and manage risks more efficiently. Fintech
companies provide quicker, better quality, more convenient, and cheaper financial services
with a seamless process 24 hours a day, seven days a week, or nonstop, compared to
conventional financial companies.
Fintech uses advanced technologies such as artificial intelligence, machine learning,
and data science to develop solutions for financial needs (Hua et al., 2019). One example of a
development in fintech is cryptocurrency. This paper examines research findings, methods,
and future research directions to identify to map the existing landscape of cryptocurrency. As

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cryptocurrency technology is still developing, a comprehensive cryptocurrency literature
review will help researchers to advance research in this particular field.
Cryptocurrency is not a new term that exclusively belongs to this era; in 1983, David
Chaum wrote about the use of cryptography applications for future e-cash. Cryptocurrency,
also known as virtual currency, is an online payment system that may function as real
currency but is not administered or ratified by a central government (Lovell, 2019).
The European Central Bank (ECB) sees cryptocurrency as one type of crypto asset,
which is defined as a new type of “asset recorded in digital form and enabled by the use of
cryptography that does not represent a financial claim on, or a liability of, any identifiable
entity” (Agur et al., 2022). Cryptocurrency is electronic-based money or virtual currency that
exists only on the internet, that may or may not have intrinsic value backed by an institution,
and that uses cryptography to secure the generation, transaction, and storage of its value (Wu
et al., 2022).
Since the beginning of the 21st century, people all over the world have seen a decline
in the use of cash, especially during the Covid-19 pandemic. The ECB recorded that in 2019,
only 48% of the total transactions in Europe used cash (European Central Bank, 2020).
Consumers use commercial bank money, private-issued electronic payment forms of money,
and private-issued cryptocurrency (Cœuré & Loh, 2018).
Literature Review
Cryptocurrency, as part of fintech, uses blockchain technology combined with
cryptography or encryption as the core to secure the financial activities related to its currency
function. With blockchain, the participants of a financial system can easily find out the list of
approved transactions by entering the private key into the system. Once verified, the
transaction will become part of the blockchain (Afzal & Asif, 2019).

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Cryptocurrencies utilize blockchain technology to enable the remote peer-to-peer
transfer of electronic value where there is no trust between participants, also known as zero
trust architecture. In a conventional system, the electronic representations of money are
exchanged via centralized infrastructures, where one of the more trusted intermediaries
verifies and settles the transactions.
Blockchain is often referred to as a distributed ledger technology that enables
participants within the systems to transact without the need for a centralized trusted authority
that stores peer-to-peer transactions record in blocks that are subsequently appended as new
transactions happen (Mendling et al., 2018; Woodside & Amiri, 2018). In other words,
blockchain is a decentralized cryptography platform that records all information about the
transactions ever executed within the system, using consensus protocols in a digital ledger
stored in every participant’s location that ensures a verifiable, unchangeable, and secure way
to fulfill immutability, transparency and anonymity principles.
Distributed ledger technology (DLT) refers to the algorithms, protocols, and
infrastructures that allow computers or machines in various locations to request a transaction,
validate the transaction, and update transaction records in a synchronized way across a
network. Cryptocurrencies have a distributed database in a decentralized way, where every
transaction is validated using a consensus-based checking procedure and cryptographic
parameters. Transactions are broadcast to the entire set of participants who will validate them
in batches of data known as "blocks," without any centralized authority, or popularly known
as “peer-to-peer.” The ledger of these activities is recorded in separate but connected digital
blocks; thus blockchain is also known as "blockchain technology."
Figure 1 below shows how blockchain works in cryptocurrency, from a transaction
request to the final stage of a transaction. The advent of cryptocurrencies generates many
opportunities such as fast, efficient, anonymous, and unmediated transactions (Arias-Oliva et

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al., 2021). However, there are still concerns regarding blockchain and its applications in
society. As understanding the potential consequences of blockchain technology develops,
moral and ethical challenges need to be addressed (Tang et al., 2020).
Figure 1
Blockchain Process from Transaction Request to Final Settlement (World Economic Forum)
Adapted from “Cryptocurrencies, Blockchain and Regulation: A Review,” by Afzal and Asif
(2019).
There are numerous cryptocurrencies currently in the market, but generally, they can
be categorized into three groups of issuers: Central Bank Digital Currency (CBDC),
commercial banks, and crypto-assets. In the CDBC case, the central banks supply
cryptocurrencies in the form of electronic reserves, which are available only to the banking
sector and are then distributed through financial institutions.
As for the cryptocurrencies issued by commercial banks, they are created by credit
extensions that are backed by a real capital investment of fiat money. As for the crypto-assets,
the cryptocurrencies issued have no centralized technical processing, without the precondition
of trust to any institution, and without preset liability of any party to vouch for the intrinsic
User X wants to
transact with Y
using
cryptocurrency
Online
transaction is
converted into
data “block”
Every computer in
the network
receives the
broadcasted block
Every computer in
the network
receives the
broadcasted block
Every computer in
the network
tries to
get the “key” and
verify the validity of
the transaction
using certain
cryptography
The finder of the
“key” then convert
the key and the
transaction into a
new block that is
added to the data
“chain” of all existing
transactions
The new data “chain” that
represents the successful
transaction, is now already
created and broadcasted as
the new “ledger” to each
computer in the network.

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value. Among the most popular crypto-assets are Bitcoin, Ethereum, Ripple, Litecoin,
Monero, Ethereum Classic, NEM, Dash, IOTA, Waves, Dogecoin, and Augur (Milutinović,
2018).
Many countries have their cryptocurrencies issued by private institutions in various
countries, such as Gopay by Gojek, QQ Diamond by QQ, Libra by Facebook, and E-money
by Indonesian government banks. Currently, there are numerous pilot projects and launched
CBDC, including e-Yuan in China, Digital Euro in Europe, e-Krona in Sweden, and DCash in
Eastern Caribbean nations (Bordo & Levin, 2017; Mitschke, 2021). Cryptocurrencies have
attracted the attention of information technology professionals, economists, investors, banks,
governments, and law enforcement agencies (Molling et al., 2020).
The potential impacts of cryptocurrencies have been recognized by government
institutions such as the European Central Bank, the US Federal Reserve, the UK Treasury, the
People’s Bank of China, the Bank of Indonesia, and other related governmental institutions.
Corporate reports, government agencies' working papers, and academic research papers about
cryptocurrencies are answering the challenge to understand cryptocurrencies. Countries such
as China, Europe, and the UK, along with international financial organizations, have produced
policy recommendations, guidance, and principles to apply cryptocurrencies in the current
financial system. This paper maps the landscape of cryptocurrency academic research.
Research Method
We conducted a review of the existing academic and working papers concerning
cryptocurrency or digital currency that uses blockchain. A review is a method to map and
identify key points within existing literature considered suitable for the complex research
area.
To achieve a systematic review, relevant documents about cryptocurrency were
retrieved using ProQuest search. The search keywords were “Fintech” and “Crypto.” We then

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selected documents that were available with full text in scholarly journals that had gone through
peer-review, with English as the language of the text. As the result, 19 papers remained.
Figure 2
Framework to Select the Articles
In Google Scholar, three relevant working papers from the European Commission and
National Bureau of Economic Research about Digital Currency and Cryptocurrency were also
selected. Thus, in total, there were 22 papers used in the review. The purposes and methods of
the collected documents were then put in a table for future review. The last step was to further
elaborate on the selected papers and provide conclusions for future research suggestions.
Results and Discussion
Blockchain technology has become a popular new technology that brought forth
digital products such as cryptocurrencies, smart contracts, smart identification, and tracking,
among others. Blockchain technology itself is a distribution register consisting of blocks of
Search data using Proquest website with keywords: “Fintech and Crypto”
The search found: 28.426 documents
Selecting criteria for articles:
Only accept articles that discuss Cryptocurrency in an academic journal
Peer reviewed and only use English papers
Filter the articles that directly discuss fintech and cryptocurrency
The selection reduces the number to 300 papers
Number of articles that have been successfully collected: 19
Analyze and review the journal to list the conclusion for each paper
Identify and categorize the objectives of each paper
Write the Review

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interconnected transactions. Transaction blocks are called registry nodes. In general, they
represent a decentralized database designed to store and confirm the reliability of information
(Tsindeliani & Egorova, 2020).
Figure 3
How Blockchain Works
Adapted from various sources, illustrated by the author
When a participant in the system requests a transaction, the request is broadcast to all
peers (computer nodes) in the network, and eventually reaches certain computer nodes that
function as miners. A miner will initiate the process to append the transaction into the global
ledger by including the request in the transactions pool, which the miner then adds the hashes
to the metadata and a nonce to try to produce a hash below a target value (defined by the
complexity of the network).
Once a miner is successful in producing the needed hash, the miner broadcasts the
transactions pool and its associated hash as a new block replacing all the previous blocks in
all active nodes. Included within the metadata in the new block is a reference to the

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previously mined block, allowing the acceptance of the miner’s new block into the
blockchain.
Miners are incentivized by two rewards: the fees in individual transactions, and a
system-specific mining reward, for example, 0.01 Bitcoin. These rewards are then collected in
a special coin generation transaction within the new block’s transaction pool.
Blocks serve to generate the money supply through the mining rewards included in
each new block and to provide partial transaction orders that come before the new block is
generated. This algorithm allows all participants in the network to impose a global or partial
transactions order. The algorithm will prevent double-spending by maintaining a list of
unspent blocks and validating a transaction only if its input address appears in this list. The
storage of the maintained list is called a crypto-wallet.
The market capitalization of cryptocurrencies was non-existent before February 2010,
virtually very small before 2013, and was relatively stable at less than $20 billion until the
end of 2016 when it became volatile and has been ever since (Fan et al., 2022). At the end of
2017, it rose to over $200 billion, then at the beginning of 2018, the market capitalization rose
to over $800 billion. In December 2018, the capitalization fell to below $130 billion and was
volatile again after the Covid-19 pandemic spread throughout the world in March 2020, when
the capitalization peaked again at over $2 trillion in May 2021. The market cap then fell to
$1.2 trillion in June 2021 after the second wave of COVID-19, peaked all-time-high of $2.9
trillion in November 2021 after the US and European countries relaxed their pandemic
restrictions, fell deep to $1.2 trillion due to the massive selling in March 2022 after the
Russian invasion over Ukraine, then fell deeper to $868 billion in June 2022 due to the fear of
worldwide recession.
The following graph shows the volatility of the market capitalization of
cryptocurrencies, which implies the volatility of the value of cryptocurrencies in the face of

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fiat money. Volatility also indicates the popularity, trading volume, and susceptibility of
cryptocurrencies to speculative bubbles, high energy prices, and geopolitical situations among
other factors. Although not directly related, the graph also implies the number of
manipulations, scams, and fraud risks related to the popularity of cryptocurrency.
Figure 4
Total Cryptocurrency Market Capitalization from 2016 to 2022
Adapted from www.coinmarketcap.com
The graph alone represents the growing expectations and hopes of the consumers to
use an electronic representation of money, whether for the real purpose of payment or
speculative purposes. The growth shows the importance of mapping the knowledge landscape
about cryptocurrencies related to the economic condition of countries, including trade,
commerce, law and regulation, security, and safety matters.
There are several benefits of cryptocurrency. First, the government cannot appropriate,
manipulate, or change the value of the cryptocurrency. Second, it is considered a secure
transaction against fraud and identity theft, an immediate and final settlement, and
information-accessible for all participants. Third, it has lower transaction, maintenance,
storage, and circulation fees. Fourth, cryptocurrency is more convenient for the participants to

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transact without the need for an intermediary or centralized regulator. Fifth, it offers a higher
degree of freedom to transact due to the anonymous nature of cryptocurrencies.
However, all these perks are not entirely certain. For example, the government can
still confiscate the hardware that holds the digital wallet containing the cryptocurrencies. The
hackers still can steal the digital wallet stored in the cloud server. The device to mine
cryptocurrencies requires very high-performance capability. Additionally, the participants still
need a cryptocurrency exchange platform to trade the cryptocurrency for fiat money, and
there are limited types of goods and services available for trade with the cryptocurrencies.
The disadvantages of cryptocurrencies are price volatility (Todorof, 2019), lack of
market transparency (Commission, 2018; Cumming et al., 2019), low market integrity (Lee,
2020), and lack of investor and consumer protection (Kharisma, 2021), lack of adequate law
and supervision process (Tsindeliani & Egorova, 2020), high demand of high-performance
computing hardware (Ghiro et al., 2021), high consumption of electrical power (Schinckus et
al., 2020), susceptibility to energy prices (Gurrib, 2019), operational weaknesses, popularity
as a tool for illicit payment for illegal transactions (Afzal & Asif, 2019), the technical
vulnerabilities of services and trading venues (European Central Bank, 2020), the difficulty to
intervene the exchange rate with conventional monetary policy (Mitschke, 2021), and the
possibility of using cryptocurrencies for criminal purposes (Șcheau et al., 2020), including
money laundering and tax evasion (Barnes, 2018; Todorof, 2019).
Table 1
List of Papers, Purpose, and Methods
Author
Purpose of Articles
Method
Scheau et al., 2020
Examines the worldwide operation of cryptocurrencies
and their connections with cybercrime.
Literature
review and
quantitative

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Author
Purpose of Articles
Method
Lovell (2019)
Explores different issues surrounding Bitcoin and how
the U.S. government, specifically the Internal Revenue
Service (IRS), should regulate cryptocurrencies to solve
the issues inherent within Bitcoin.
Case study
Chu (2018)
Explores experiences of broker-dealers, and the
similarities between the problems confronting
cryptocurrency platforms today and those that broker-
dealers faced in the late 1960s. Widespread broker-
dealer failures during the late 1960s revealed problems
with mishandled client assets, insufficient capital, and
inadequate protection of customer assets in bankruptcy.
Literature
review
Barnes (2018)
Examines the trading and popularity of
cryptocurrencies as investments and the susceptibility
of their pricing to speculative bubbles, manipulation,
scams, and fraud.
Quantitative
Afzal & Asif (2019)
Addresses various risks associated with an unregulated
cryptocurrency market and, discusses possible avenues
of regulation as well as applications of the
cryptocurrency technology for Pakistan.
Framework
building and
quantitative
Milutinović (2018)
Addresses the theme of cryptocurrency and its role in
economic growth. Types of cryptocurrencies are shown
as well as their expansion in countries in transition. The
market of cryptocurrency in Serbia and Switzerland is
discussed.
Framework
building and
quantitative
Molling et al. (2020)
Identifies main topics, main discussions, and
controversies on each topic presented in the literature
on cryptocurrencies.
Literature
review and
framework
building
Tsindeliani &
Egorova (2020)
Shows the legal status quo of cryptocurrencies in the
Russian Federation. Describes
references to the existing
and proposed legislation as well as to the statements of
Qualitative
and
descriptive

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Author
Purpose of Articles
Method
several international, supranational, and national
regulatory bodies.
Cortez & Mongrut
(2021)
Determines the best model for predicting the short-term
log rates of the bid-ask spreads in the three biggest
cryptocurrencies—Bitcoin, Ripple, and Ethereum—and
in the 16 major fiat currencies listed by Bloomberg.
Literature
review and
quantitative
Arias-Oliva et al.
(2021)
Shows empirically that fsQCA provides a
complementary and enriching perspective to interpret
data about the use of cryptocurrencies.
Literature
review and
quantitative
Kliber & Włosik
(2019)
Investigates interdependencies between leading
cryptocurrency exchanges (American, European, and
Japanese).
Literature
review and
quantitative
Mazambani &
Mutambara (2020)
Applies the theory of planned behavior (TPB) to predict
behavioral intention to adopt cryptocurrency.
Literature
review and
quantitative
Cumming et al. (2019)
Explains the regulatory and security issues around
blockchain and initial coin offerings (ICOs) in an
increasingly decentralized economy. Examines ICO
structures and how this crowdfunding mechanism has
the promise for economic innovation. Explains how
fraud may be carried out within these innovative asset
classes, and the evolving regulatory struggles.
Framework
building
Duma & Gligor (2018)
Identifies general insights of payment behavior of the
students about cryptocurrencies. Assesses students’
overall knowledge about cryptocurrencies.
Qualitative
Othman et al. (2020)
Investigates the long- and short-run effects of
cryptocurrencies’ market capitalization development on
the banks’ deposit variability in the Gulf Cooperation
Council (GCC) region.
Literature
review and
quantitative
Stepanov et al. (2019)
Identifies provisions needed for implementing law
enforcement internationally for digitalization-related
matters, including prosecution process, decision
Literature
review

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Author
Purpose of Articles
Method
making, coordination among law enforcement officers,
and assessment of performance. Comparison of legal
methods, dialectical methods, and analytic methods
within countries concerning digitalization matters.
Tang et al. (2020)
Reviews the ethics of blockchain, the main socio-
technical challenges in technology and applications,
and ethical issues of blockchain. Builds a conceptual
framework for blockchain ethics study.
Literature
review
Hua et al. (2019)
Reviews studies in the fintech areas, such as artificial
intelligence, blockchain, and crowdfunding.
Summarizes the contributions made by all six papers in
the special issue where this paper was published.
Literature
review
European Central Bank
(2020)
Examines the issuance of the Digital Euro as a central
bank digital currency (CBDC) from the perspective of
the Eurosystem.
Literature
review
Mitschke (2021)
Examines the effectiveness of Central Bank Digital
Currency and monetary policies.
Quantitative
European Central Bank
(2021)
Analyzes the digital adoption across the Euro
area and EU c
ountries, the implications of digitalization
for measurement, productivity,
labor markets and inflation, and the coronavirus
(COVID-19) pandemic and its implications.
Literature
review
Vasiliev et al.
(2020)
Analyzes opportunities and prospects for the
implementation of artificial intelligence in the legal
system. Identifies possible areas of large-scale digital
legal activities.
Literature
review and
framework
building
Cryptocurrency uses the digitization process of money that has grown in popularity
with fintech adoption that making money movement cheaper, faster, and more secure.
Cryptocurrency works on a peer-to-peer basis to facilitate the creation, transfer, or storage of
funds with or without a centralized ledger. The peer-to-peer basis can be distributed

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physically or logically in separated areas, as well as in one area. Cryptocurrency can be
regulated or non-regulated by a government, depending on the initial design.
According to their liability’s bearer, cryptocurrencies can be categorized into three
types: central bank, private entities, and no-bearer. For a cryptocurrency or digital currency
issued by a central bank within a country or region, the same central bank is liable at all times
to ensure the value of the cryptocurrency for buying goods and services does not fluctuate
over time (European Central Bank, 2020). A central bank is accountable to the citizens where
it is located. In theory, a central bank cannot default or fail to fulfill its obligation to the
citizens.
Table 2
Characteristics of CBDC and Other Money-like Assets
.
Adapted from “Central Bank Digital Currencies and Monetary Policy Effectiveness in the
Euro Area,” by A. Mitschke (2021).

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For a cryptocurrency issued by a commercial bank or private institution, the
commercial bank or private institution holds the liabilities and must comply with the
regulations supervised by public authorities. In theory, the private entity could default and be
unable to fulfill its liabilities or the claims of its customers. Although the customers are
protected by a legally binding regulatory framework within a country, the private issuer is
only accountable within their promises and business limits. The regulator or public authority,
through law and regulations, could require the private entity to be protected by deposit
insurance schemes. The regulator could also provide lending for a troubled private entity in
exceptional situations.
For a cryptocurrency issued by an unknown entity or in the popular term “crypto-
assets,” no entity is liable to ensure anything of any kind. For this type of cryptocurrency,
there is no reliable framework to sustain its value and protect its direct holders. These assets
are unregulated, highly volatile in price due to lack of intrinsic value, and potentially could
result in the loss of the entire amount of assets due to inconvertibility to fiat money.
One of the problems that emerge due to the cryptocurrency application is cybercrime,
which includes the problem of manipulation and fraud that harms the owners of
cryptocurrencies (Barnes, 2018; Cumming et al., 2019; Șcheau et al., 2020; Stepanov et al.,
2019; Vasiliev et al., 2020).
A cryptocurrency exchange platform conducted a survey among 1108 traders between
April 23 and April 30, 2018, and identified the three biggest problems in the cryptocurrency
market: lack of security (40%), high trading fees (37%), and lack of liquidity (36%), where
more specifically the biggest issue is the sophisticated hackers who compromised the
exchange platform (Cortez et al., 2021). Types of crime related to cryptocurrency include
crypto fraud, uncertain regulations, cyber security fraud, fictitious assets, fake investment

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funds/advisors, unregulated manipulated crypto exchanges, exchange hacks, social media
identity hacking, ransomware, crypto-jacking, and taxation fraud (Cumming et al., 2019).
Undoubtedly, this problem came about due to a lack of regulation, accountability, and
a desire to create security with the brokerage by the founders, owners, and developers
(Barnes, 2018). There are very few companies that comprehensively assess the risk of
corruption or compromise of data privacy (Șcheau et al., 2020), so there are still many users
who are afraid to invest in this currency because there is no guarantee of asset safety.
In response to the above problems, the US Congress and the SEC enacted the same
application as broker-dealers who failed in the market and operational turmoil during the late
1960s. The need to issue regulations for broker-dealers is explained as follows (Chu, 2018):
• Historical Background – Understanding the regulations and potential applications of
the currency platform will help bring understanding to its historical background.
Congress enacted SIPA in 1970 in response to a series of broker-dealer failures that
occurred.
• Customer Protection Rule - Customer protection rules are intended to separate the
broker-dealer's activities and assets from those of its customers, ensuring that there are
sufficient assets to satisfy the customer's claims in the event of a failure.
• Net Capital Rule - The net capital rule ensures that broker-dealers maintain sufficient
liquidity to meet their customers' claims. However, the purpose of the net capital rule
is not to avoid broker-dealer failure.
• Broker-Dealer Bankruptcy - Securities Investor Protection Act of 1970 (SIPA)
provides further protection for customers. Looking for an alternative to the bankruptcy
code, Congress established the Securities Investor Protection Corporation (SIPC) to
oversee bankruptcy proceedings for broker-dealers.

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Currency digitalization requires the solution of optimizing the decision-making
process based on data collection, coordinating of actions of a large number of law
enforcement officers, and permitting criminal cases to be conducted in an electronic form
(Stepanov et al., 2019). The future of legal regulation is related to the implementation of
criminal jurisdictional activities.
Future study is needed to assess the large-scale digital revolution that affects all
spheres of society, including the area of legal activity, such as the initiative to use robot
lawyers in legal corporations, automation of legal processes, use of smart contracts,
application of blockchain technologies, and the proliferation of cryptocurrencies, including
law enforcement about cybercrime (Vasiliev et al., 2020).
Cryptocurrencies are partly considered a threat to the banking sector, especially
commercial banks, the central banking system, and the global financial system. With their
continued use, appreciation of value, and speculative bubbles, cryptocurrencies threaten the
economic stability of the foreign exchange market (Barnes, 2018; Othman et al., 2020).
Digital payments dominate the market related of the activities of buyers who make online
payments, and their money stored in an e-wallet is maintained. The literature (Duma &
Gligor, 2018) includes research on some Romanian citizens, especially those who focused on
Generation Z, as well as Gen-Tech or iGen who grew up with internet technologies.
The future of cryptocurrencies seems secure given the global push toward the Internet
of Things. Institutional innovation and adoption of cryptocurrencies are in overdrive as they
predict an increase in the use of digital currencies. There are shining accounts that can be
changed by the widespread use of digital currencies and the democratization of the economy,
especially in developing countries (Mazambani & Mutambara, 2020).
Bitcoin, Ethereum, and other non-CBDCs are now mostly considered digital assets
that are used only for speculative investing. Meanwhile, DCash, e-Yuan, Digital Euro, and

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other CBDCs from central banks of established countries are in the course to complement
legal currency used for real-life transactions in their respective countries. Gopay, Wechat pay,
Alipay, Samsung pay, Apple pay, Libra, and other various digital currencies are widely used
in society's daily lives in various countries.
Bitcoin, as one of the non-CBDCs, is one of the most demanded cryptocurrency
products in the market. Research from (Kliber & Włosik, 2019) says that the price
interdependence between markets that allows Bitcoin trading in the same traditional currency
(Euro and US dollar), is slightly higher than the spillover between Bitcoin market quotes in
different fiat currencies. The problem of price determination and stability becomes one of the
problems facing non-CBDCs. The problem will bring difficulties for the market in using
cryptocurrencies as a stable and reliable currency.
Conclusion
This article shows that cryptocurrency is a very important innovation to the digital
world of financial transactions, enabling its entire network to control multiple spending
without the need for a central authority to permanently monitor and validate financial data.
Cryptocurrencies will develop, along with their benefits and disadvantages, driven by
technology and their need among consumers and financial institutions.
It should be noted that modern technology development will always precede
regulations and all regulations have loopholes for criminal acts to enter. Therefore, the
government must as soon as possible provide legal frameworks and standards for digital-
based security to protect digital assets use, including the use of cryptocurrency. The modern
stage of digitalization of justice requires the proactive introduction of modern technical means
to achieve the objectives of market integrity, investor protection, and market sustainability
with high effectiveness and efficiency (Stepanov et al., 2019).

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Regulations that will be or are being made must facilitate safe and open financial
markets and be adaptive enough to accommodate future developments in cryptocurrency. By
adopting the principles of technology-neutral, a strategic framework for ethical
cryptocurrency adoption, and clear law-making objectives, the government can design a legal
framework that can minimize the adverse effects of using cryptocurrency as the complement
for fiat money.
Future research direction should be aimed at identifying how to accelerate the
development and adoption of cryptocurrencies within society. Research could also be aimed
at identifying problems concerning cryptocurrency and its effect on productivity, the labor
market, inflation, and monetary policy. There are also concerns about cryptocurrencies
created by private entities would jeopardize the sovereignty of nations, thus deserving further
investigation.

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